China Fund newspaper Green
During the Spring Festival holiday, overseas giants successively disclosed the fund positions during the period. Overseas giant China’s investment trends are exposed. For example, the giant capital group with a trillion-dollar long-term investment exceeds 800 billion yuan, and the big MAC fund has increased its position by over 80%. JPMorgan Chase’s flagship China Fund increased its holdings () for two consecutive months, until it bought Kweichow Moutai as the largest awkward stock.
Morgan Stanley, an international investment bank that has continued to sing high-profile songs recently, said that once A shares are adjusted, it is the time to buy.
Let’s take a look together.
The flagship fund of Trillion Capital Group, Jiacangmei, exceeds 80%
The latest scale of the Euro-pacific Growth Fund, a subsidiary of the trillion-dollar long-term investment giant Capital Group, is US$ 130.742 billion, equivalent to about 886.888 billion yuan. It is jointly managed by 11 fund managers and invests in growth stocks in Europe and Asia-Pacific markets.
The European Pacific Growth Fund used to be the active management fund holding the most Kweichow Moutai.
According to the information from official website, by the end of 2022, the top ten stocks of the European Pacific Growth Fund were Novo Nordisk, Reliance Industries, Moet Hennessy-louis vuitton Group, ASML, Canadian Natural Gas, TSMC, AIA Insurance, Airbus, and No.13 Co., Ltd. The top ten heavyweight stocks include two pharmaceutical companies.
Source: official website, Capital Group.
The positions of EuroPacific Growth Fund include many shares of China companies.
For example, by the end of 2022, the top 100 stocks of the fund included Kweichow Moutai, Galaxy Entertainment, Xinao Energy, Tencent Holdings, Yaoming Biotechnology and Midea. Among them, the fund holds 4.2255 million shares of Kweichow Moutai, with a market value of 1.046 billion US dollars.
Source: comprehensive capital group official website and fund letter materials.
Compared with 5,316,900 shares at the end of the third quarter of 2022, the number of shares held by the fund in Kweichow Moutai decreased by 20.52%. The European Pacific Growth Fund once actively managed Public Offering of Fund products for the world’s largest holder of Kweichow Moutai, but in recent two years, the fund has continuously reduced its holdings of Kweichow Moutai.
In addition to Kweichow Moutai, in the fourth quarter of 2022, the fund’s shareholding in Yaoming Biotechnology also decreased significantly, with a reduction of 67.85%. In addition, in the fourth quarter, the fund also reduced its shareholding in Tencent Holdings and Xinao Energy. In the fourth quarter, the stocks that the fund significantly increased their positions were Galaxy Entertainment and Midea Group. Among them, the fund increased its holdings of Galaxy Entertainment by 6.95%. The fund increased its holdings of Midea Group by 82.81%.
In addition to the European Pacific Growth Fund, the New World Fund, another flagship fund under the Capital Group, also disclosed its positions as of the end of 2022. The latest scale of New World Fund is $46 billion, which is jointly managed by 12 fund managers, and the fund invests in emerging markets.
Fund Jun compared the fund at the end of 2022 and the end of October 2022 (the data at the end of October comes from the fund’s annual report. The fiscal year of the fund is from November 1st of the first year to the end of October of the following year. ) found that in the last two months of 2022, the fund significantly increased its position in Midea Group, significantly increased its position in China Ping An, and increased its position in Baekje Shenzhou (ADR) and () to a certain extent.
Source: Comprehensive official website and Fund Letter Cover materials.
Specifically, during November and December of 2022, the Fund increased its holdings of China Ping An by 20% and Midea Group by 31%. Careful friends will find that the above European Pacific Growth Fund has also significantly increased its holdings of Midea Group.
It is understood that the fund managers of New World Fund prefer companies that can generate cash flow continuously, companies that have pricing power, and companies that may directly or indirectly benefit from long-term trends (such as supply chain localization and energy transformation). Companies in this area include related companies such as solar energy and electric vehicles. According to the Fund, China’s economic recovery may become a catalyst for related stocks in the coming year. The New World Fund focuses on domestic enterprises that are consistent with government policies and are not affected by geopolitical tensions.
At the industry level, information technology is the largest industry in the portfolio, and its shareholding is mainly concentrated in companies that manufacture semiconductors and related equipment. Health care is a multinational pharmaceutical company with the second largest portfolio, focusing on promising new drugs to treat obesity and diabetes. Finance is the third largest industry in the fund. Materials are also a heavy fund industry, with companies producing copper, iron ore and nickel in their positions.
JPMorgan Chase’s flagship fund added "Kweichow Moutai" for two months.
JPMorgan Chase’s flagship China Fund-"Morgan Fund China A-share Opportunity Fund" is one of the largest China equity funds overseas with the latest scale of about 42.7 billion yuan. By the end of December 2022, the fund’s heavyweight stocks included: Kweichow Moutai, China Merchants Bank, (), China Ping An, Midea Group, (), (), (), (). In December, the fund increased its position in Kweichow Moutai by 34.76%. It is worth noting that this was the opening of Kweichow Moutai in November, and it was bought as the seventh largest awkward stock in one fell swoop, and Kweichow Moutai was also promoted from the seventh largest awkward stock in the fund to the first awkward stock. In addition to Kweichow Moutai, in December, the fund increased its position in Contemporary Amperex Technology Co., Limited by 8.44%, increased its position in Midea by 9.14%, reduced its position in Mindray Medical by 7.84% and increased its position in Wanhua Chemical by 9.20%.
Source: Morningstar
JPMorgan Chase’s other flagship China fund, JP Morgan Funds-China Fund A (ACC)–USD, has the latest scale of US$ 6.596 billion. At the end of December 2022, the fund’s heavyweight stocks included Tencent Holdings, Meituan, Alibaba, JD.COM, Pinduoduo, Yaoming Biotechnology, China Ping An, Netease and China Merchants Bank. In December 2022, the Fund reduced its holdings of Tencent Holdings by 3.65%, and increased its positions in Internet companies such as Meituan, Alibaba, JD.COM and Pinduoduo.
Source: Morningstar.
UBS, Schroeder Investment, Fidelity International
Fund Jun previously reported that in December, UBS, Schroeder Investment, Fidelity International and other funds with more than 10 billion yuan also increased their positions in Kweichow Moutai.
For example, UBS (Lux) Equity Fund-China Opportunity (USD) P-ACC, a selected stock fund of UBS (Lux) in China, increased its position in Kweichow Moutai by 14.03% in December 2022 and reduced its position in Unacon by 15.5% in the same period. As of January 20, 2023, the total size of this fund was 5.773 billion US dollars. This fund is managed by Shi Bin, a famous overseas China investor. After two years of downturn in 2021 and 2022, since the beginning of 2023, the net value and scale of the fund have shown an upward trend.
Consumption of blue chips is one of Shi Bin’s strengths. In the second half of 2018, after the stock price of Kweichow Moutai fell sharply, Shi Bin made a decisive purchase and successfully won the rebound in 2019. Prior to this, Shi Bin also benefited a lot from Kweichow Moutai.
By the end of December 2022, the heavyweight stocks of UBS (Luxemburg) China Select Fund included Tencent Holdings, Kweichow Moutai, Netease (ADR), Ping An of China, Unacon of China Merchants Bank, Alibaba (ADR), AIA, Ping An Bank and Meituan. In December, the fund increased its position in Kweichow Moutai and reduced its holdings outside Unacon. The fund slightly reduced its holdings in Ping An, China, by only 1.22%.
China A, a subsidiary of Schroder Investment, increased its positions in the top 10 positions one by one in December, among which Kweichow Moutai increased its positions the most, reaching 21.65%.
As of January 20, 2023, the latest scale of this fund is 4.571 billion US dollars. By the end of December, 2022, the top ten stocks of the Fund included China Ping An, China Merchants Bank, Kweichow Moutai, Hengrui Pharma, Longji Green Energy, Midea Group, No.9 Intelligent, Wanhua Chemical, () and (). In addition to Kweichow Moutai, the fund increased its holdings of Hongfa shares by 7.37% in December, which was second only to Kweichow Moutai.
China Consumer Power Fund, a subsidiary of Fidelity International, also slightly increased its position in Kweichow Moutai in December. The range of jiacang is 3.40%. By the end of 2022, the fund scale was 4.406 billion US dollars. In December 2022, the fund increased its positions in Kweichow Moutai by 3.4%, China Ping An by 5.95% and Alibaba by 0.31%. In the same period, the fund reduced its holdings of Tencent Holdings by 3.91% and Mengniu Shares by 6.72%. By the end of December 2022, the fund’s heavyweight stocks included Tencent Holdings, Alibaba, Meituan -B, Kweichow Moutai, AIA, China Ping An, Mengniu, Galaxy Entertainment and Ctrip.
Morgan Stanley: If the market adjusts, it is the time to buy.
On January 19, 2023, Morgan Stanley pointed out in its research report that investors’ mood weakened on the eve of the Spring Festival. The factors supporting China’s bullish stock market are being realized. "If there is an adjustment after the Spring Festival, we regard it as a bargain-hunting opportunity".
Morgan Stanley upgraded China’s market rating on December 4th, 2022, and then upgraded China to High Ratings after nearly two years. Just one month later, Morgan Stanley once again published a "bullish" report: in view of the fact that the China epidemic policy exceeded expectations, it is reasonable to raise the target points of some China market indexes again.
A-share sentiment index compiled by Morgan Stanley, source: Morgan Stanley Report. The above figure shows that despite the continuous inflow of northbound funds before the holiday and the strong rebound of A shares, the mood of A shares is far from overheating.
Morgan Stanley pointed out that the factors supporting the bullish China stock market are being realized. Under the Spring Festival effect, some investors may take profits, which may bring the opportunity to buy. From the data of December 2022, the economic activity and epidemic recovery exceeded expectations. For example, China’s GDP in the fourth quarter increased by 2.9% year-on-year, which was the same as the previous quarter. In January 2023, social mobility data continued to improve. Morgan Stanley cited data from relevant universities and pointed out that about two-thirds of people in China have been infected with Omicron. This means that the economic recovery is earlier and stronger than expected. It is likely that after the Spring Festival, corporate profits have bottomed out and the economic recovery has accelerated.
Morgan Stanley pointed out: The recent easing of Sino-US relations, supervision and support for the development of platform economy, and high-level signals to encourage the development of market economy are all beneficial to the performance of China stocks. In the previous report, Morgan Stanley said that it was more optimistic about offshore China stocks (including Hong Kong stocks and overseas listed ADR) than A shares. Between A shares and offshore China stocks, when should investors turn to A shares? Morgan Stanley said that it depends on three conditions. First of all, the valuation of A shares compared with offshore China stocks; Second, the low allocation of offshore China stocks by overseas funds has weakened; Third, after the normalization of inbound tourism, overseas institutions can enter the country to do their best.
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