E Fund's small and mid-cap hybrid securities investment fund officially exited the stage of history on Teacher's Day, and will continue to serve everyone's assets under the new name of E Fund's high-quality selected hybrid securities investment fund.

As the first billionaire in equity funds, Zhang Kun can also be called a teacher in terms of value investing.

So what changes have E Fund's small and medium-sized caps changed after the name change compared to before?

What investment plan does Zhang Kun have for the products after the name change?

The first change is the change in investment objectives. The investment objective emphasized by the old fund name is to achieve long-term asset appreciation by investing in small and medium-cap stocks with competitive advantages and high growth potential.

However, judging from Mr. Zhang’s holdings in the past two years, it does not meet the definition of small and mid-cap stocks. Maotai, which has a heavy position, ranks first in A-share market value. How can it be said to be a small- and mid-cap stock?

From the perspective of Mr. Zhang’s personal style, small and medium-sized stocks no longer fit his current temperament.

The investment objective of the new fund name is to select high-quality companies to achieve long-term asset appreciation.

Combined with positions, this definition becomes much more accurate.

The second change is the change in investment scope. Compared with before, the new investment scope increases investment in Hong Kong stocks and expands the investment scope of fund products.

Combined with the current scale of Zhang Kun's management, another market is indeed needed to divert part of the funds so that positions can be diversified. From another fund product managed by Mr. Zhang, E Fund Blue Chip Selection, we can see that Mr. Zhang is still more fond of it at this stage.

Hong Kong stocks are value investment targets.

The third change is in the investment strategy. Compared with the previous investment strategy, risk management is emphasized and hedging is combined with stock index futures.

Maybe Mr. Zhang believes that when the market style is wrong, appropriate stock index hedging can offset some of the losses caused by falling stock prices to fund assets.

The fourth change is the change in the performance comparison benchmark. The previous performance comparison benchmark corresponded to the three indexes of Tianxiang Mid Cap, Tianxiang Small Cap and China Bond Index. The new performance comparison benchmark is CSI 300, CSI

Hong Kong 300 and ChinaBond Index.

This is also a new performance comparison benchmark that combines the new investment scope and investment objectives.

In general, Wuji believes that the new fund is more suitable for Mr. Zhang’s investment style, and he also believes that this product can continue to hit new highs in Mr. Zhang’s hands.

This year’s value investment style is really uncomfortable. Since Mr. Zhang took over E Fund’s small and medium-sized companies in September 2012, it has been nearly 9 years now. Only the loss in 2018 was 14.30%, and the rest of the years have been positive returns.

The loss of this product this year is 10.72%, which is enough to show that due to the influence of multiple factors such as scale and market environment, Teacher Zhang will not play this year.

There was a general decline in 2018. There is nothing we can do about it. This year is a structural market. This return can only show that Mr. Zhang is sticking to the value, and compared with previous returns, this retracement is nothing.

The name of the fund and related content have changed, but what remains unchanged is Teacher Zhang’s insistence on value. Do you like this kind of Teacher Zhang?

Finally, let’s talk about Mr. Zhang’s views on the market based on the fund’s mid-year report.

Mr. Zhang believes that the reason why investors generally give companies higher prices is mainly to focus on the short-term profitability of the company and judge long-term profitability based on this.

Teacher Zhang believes that this method is not very scientific and more stringent requirements need to be used to select companies. He gave a standard, that is, if the stock market is closed for 3-5 years, will you still have the confidence to buy the stocks of this company.

Teacher Zhang said that this year’s market has a strong preference for high-growth companies, which to a certain extent has given related companies excessive pricing.

In Wuji's opinion, I think there is no problem with Teacher Zhang's ideas. I can also feel that Teacher Zhang still maintains confidence in the long-term effectiveness of his strategies in the current environment.

Finally, let us take a look at the income of Wuji's Heavenly Sword combination for your reference.