At present, small and medium-sized funds mainly include ETF, Desheng Small and Medium-sized Select Fund, Golden Eagle Small and Medium-sized Select Fund and Guangfa Small and Medium-sized Fund. (Of course, other funds may also invest in small and medium-sized stocks, but we generally think that only the four small and medium-sized funds mentioned above are typical. )

The main stock selection targets of small and medium-sized funds The stock selection targets of small and medium-sized funds are mainly small and medium-sized stocks with small circulation. The biggest investment advantage of this kind of stock lies in the fact that institutional investors can easily form a certain control power in it, and the market attributes are flexible, and the price is prone to relatively large fluctuations. Once the institutional forces play a leading role in it, they can often get extremely rich profits from it. In addition, the growth of small-cap stocks is good, and the performance of some companies has the potential for rapid growth.

Small-cap stocks are less dependent on the index. Small-cap stocks are different from blue-chip large-cap stocks, which often directly stimulate the rise and fall of the index, while the rise and fall of small-cap stocks have little impact on the stock index. In the market where small-cap stocks prevail, the index tends to rise slightly, which seems to be sluggish, but the investment opportunities of small-cap stocks are not reduced.

However, small-cap stocks also have some disadvantages. Due to the small circulation scale, small-cap stocks are difficult to accommodate the entry and exit of large funds, and it is difficult to realize. Moreover, many small-cap stocks are in the growth stage, and the operational risk and product market risk of small-cap stocks are higher than those of other mature enterprises. Therefore, it is easy to cause large fluctuations in the prices of small-cap stocks. These factors not only increase the investment risk of small-cap stocks, but also increase the investment opportunities of small-cap stocks. The key lies in how small-cap funds use their own advantages to seize opportunities.

The stock selection strategy of small and medium-sized funds is very different from that of most other funds. Most funds generally adopt a "top-down" asset allocation strategy, that is, first choose growth industries, and then choose typical stocks; Small and medium-sized funds follow the "bottom-up" allocation strategy, that is, select individual stocks first, and then do certain industry screening. For example, the stock selection method of Desheng small-cap selection is to screen stocks through gross profit margin, sales growth rate and other indicators to get stock reserves, the number of which is about 300; Then, through the evaluation research and the company's field research, the stock reserve was scored and 100 core stocks were screened out. This 100 core stock is the main investment target of small-cap fund in the future.

The stock selection criteria of Desheng small-cap select fund are: first, listed companies with high growth expectations; Second, listed companies that have undergone substantial changes in their fundamentals through restructuring; Third, listed companies whose value is undervalued by the market.

The stock selection criteria of Golden Eagle small and medium-sized funds are: the market value of circulation is lower than the market average, the fundamentals are good, and the growth is high. The Fund believes that small and medium-sized board listed stocks basically meet the requirements of stock selection, so small and medium-sized board stocks are the main investment targets of the Fund.

The stock selection criteria of Guangfa small-cap fund are: small market value, big growth and low price. Guangfa classifies all A-shares according to the market value of circulation from small to large, and the stocks that constitute the top 50% of the market value of circulation are defined as small-cap stocks.

Characteristics of stock selection of small and medium-sized funds The difference between stock selection strategies of small and medium-sized funds and ordinary investors. When ordinary investors choose small-cap stocks, most of them will only pay attention to the number of shares in circulation or the total share capital of listed companies, and rarely pay attention to the overall share capital of the stock sector. However, the foundation pays more attention to the sector to which small-cap stocks belong. At present, the linkage effect of Shenzhen and Shanghai stock markets is very obvious, and it is often a loss of glory. Therefore, when selecting small-cap stocks, the Fund not only pays attention to the equity of individual stocks, but also pays attention to the overall equity of the sector. Relatively speaking, small-cap stocks with smaller overall share capital are more likely to be favored by small and medium-sized market capitalization funds. The Fund also pays more attention to the start-up reasons of small-cap stocks, and chooses small-cap stocks with obvious linkage effect to open positions in a large area.

The difference between small and medium-sized funds and hot money stock selection strategies. Small-cap stocks are relatively easy to control because of their small market value and few market participants, and their trend changes greatly. Generally, hot money is mostly in the form of fast-forward and fast-out, and funds will pay great attention to the timing of entry and exit when investing in small-cap stocks. In addition, hot money advocates speculation, and the selected stocks often do not have long-term vitality and are only suitable for short-term participation. Fund stock selection will closely focus on the concept of value investment, and the selected stocks have the value of mid-line participation.

Generally speaking, the development of small-cap companies is greatly influenced by management or substantive controllers. Therefore, small and medium-sized funds attach great importance to the investigation of substantive controllers of listed companies. For example, the fund manager of Guangfa Small-cap Growth Fund thinks it is necessary to pay attention to the following factors: whether the actual controller of the company has important business entities other than listed companies, and the possibility of horizontal competition and related transactions between them; Whether the internal control system is perfect, especially whether the funds are strictly controlled, and whether there are matters such as misappropriation of funds, guarantee and entrusted financial management; Whether the management is stable; Integrity records of the substantive controller and management; Stability of key personnel affecting the development of the company.

Small and medium-sized funds generally pay more attention to the performance and delivery of small-cap stocks, and small-cap stocks with excellent performance and planned delivery will have better growth potential. Therefore, the fund's interest in small and medium-sized board stocks is far greater than that in small and medium-sized board stocks. Compared with the small-cap stocks on the main board, the overall fundamentals of small-cap stocks on the small and medium-sized board have some advantages. 38 listed companies have no losses, and many companies are in the leading position in the industry or sub-industry, with high market share and generally better performance and growth than the main board. According to statistics, more than 80% of the 38 small and medium-sized board stocks are in different funds.

At present, Guangfa Small-cap actually attaches great importance to large-cap blue-chip stocks. Although it is called a small-cap stock, it is the most inappropriate word. Golden Eagle and Desheng generally performed well in small and medium-sized markets, and only small and medium-sized ETFs were worthy of the name and performed well.

Generally speaking, in the first quarter of each year, small and medium-sized board stocks have a good performance, but the choice of funds depends on one year, generally speaking, it depends on the performance of blue chip stocks within one year.