Investment in the stock market by securities institutions is one of the ways to obtain expected annualized expected returns. Many novice stock market investors will research their heavy holdings. Whether QFII heavy holdings are good or not is still a question worth thinking about.

What is QFII?

QFII is the English abbreviation for qualified foreign institutional investors. The QFII mechanism refers to the qualification recognition system for foreign professional investment institutions to invest in China.

As a transitional institutional arrangement, the QFII system is a special channel for the orderly and steady opening of the securities market in countries and regions where capital accounts have not yet been fully liberalized.

The experience of markets including South Korea, Taiwan, India and Brazil shows that when currencies are not freely convertible, QFII can be regarded as a stable way to introduce foreign investment through the capital market.

Under this system, QFII will be allowed to remit and exchange a certain amount of foreign exchange funds into local currencies, invest in the local securities market through special accounts under strict supervision and management, and obtain various capital income, including dividends and bid-ask spreads, after review.

It can be converted into foreign exchange remittance, which is actually a limited opening of the country's securities market to foreign investment.

QFII heavy holdings: Heavy holdings: A stock held by multiple fund companies and accounting for more than 20% of the circulating market value is a fund heavy holding stock.

In other words, more than 20% of such stocks are held by funds.

In other words, stocks with heavy holdings are bought and held in large quantities by a certain institution or investor, and the institutions or large investors account for a larger portion of the assets in the stocks held.