Can I buy China Zheng Zehong’s fund?

The global stock market has plummeted recently, and pessimistic remarks have once again fermented. However, rational thinking is more precious than other people's conformity and anxiety. Recently, fund manager Zheng Zehong gave a live broadcast on the recent market decline. Let’s listen to what the fund manager has to say~

Zheng Zehong, Fund Manager

Master of Economics from the Institute of Fiscal Sciences of the Ministry of Finance, 10 years of experience in the securities industry, including 5 years in public funds Management experience. Conducted in-depth research on textile and clothing, papermaking and light industry, electric power equipment, new energy and other industries.

Excerpted from a golden sentence:

“Chief A’s cycle is improving, and it has fallen so much in the short term. From a strategic point of view, he should remain optimistic. Sometimes falls give It gives us many opportunities to pick bargains.”

“Looking back at the 3,000 points in the past ten years, most of the time, it is a relatively good buying position.”

“The market. When times are bad, it may be better to stay away from the market. Doing the right thing in the long term will help us survive the trough."

01

"The market decline gave us.

Many opportunities to pick up bargains”

How do you view the market situation since July?

Zheng Zehong: The market is indeed quite volatile this year. The decline from January to April at the beginning of the year can be said to be unforgettable. There was a good rebound in the growth sector from May to July. From July to the end of September, the entire market basically returned to the lows in April. From an investment perspective, this year feels very bad for the community because most funds are losing money. It is also difficult for us as fund managers because there are not so many opportunities that we can really seize this year and the fluctuations are relatively large.

At the beginning of May this year, I came out to communicate with everyone. The market had just bottomed out at that time. We say that being an investor is inherently optimistic, and now we do regard A-shares as a long-term improvement opportunity. Whether it is manufacturing upgrading or consumption upgrading, there is a lot of room for development in the long term, but it has fallen to such a low position in the short term. Therefore, at this point in time, we must be optimistic strategically. Falling down sometimes gives us many opportunities to pick up bargains.

Look up at the stars for a long time, keep your feet on the ground for a short time, stand in the present and see why it has fallen so much?

It is true that there have been some fluctuations in the macro environment at home and abroad this year, and the epidemic and war, especially this year’s conflict between Russia and Ukraine, have indeed brought relatively large fluctuations to the market. Seeing the Federal Reserve raising interest rates continuously overseas, the inflation problem in Europe and the United States has become more serious. So in fact, the tightening of overseas monetary policies has brought great fluctuations to global risk appetite or risk assets. This fluctuation has been transmitted to the domestic capital market, as well as the European energy crisis caused by the Russia-Ukraine conflict, etc. It makes investing in the entire market more difficult.

But at this point in time, many unfavorable factors have been reflected in the valuation level, and the Shanghai Composite Index has reached the defense battle of 3,000 points. Looking back at the 3,000 points in the past ten years, most of them are good buying levels. For now, the upgrading of China's manufacturing industry is a long-term trend, and the transfer of residents' wealth from fixed assets to equity assets is also a long-term positive process. But the long-term positive trend does not always rise, but the band is rising, so every time it reaches such a position, it is relative to the bottom of the band. It’s okay to be optimistic at this point in time.

The fund lost a lot. what do I do?

Zheng Zehong: This is the time when you should be optimistic in the long term. If you are in a relatively high position and have a heavy position, you should calm down and lengthen the investment cycle. The starry sky is still very beautiful, and there is still a lot of room for the new energy industry.

Fixed investment cannot avoid the inherent risks of fund investment, cannot guarantee investors’ returns, and is not an equivalent financial management method that replaces savings. The market is risky and you need to be cautious when entering the market.

Is it appropriate to cover positions now?

Zheng Zehong: At present, the major index points have all returned to their positions at the end of April, which is very attractive from a valuation perspective. It is very difficult to cover a position to the lowest point.

From a short-term perspective, it

The first step is to choose a track with greater future space from top to bottom;

The second step is to choose the right direction and Do detailed analysis and comparison from bottom to top.

Many times, in investing, choice is more important than effort. Be sure to see the direction clearly. For example, if you choose consumption and medicine after 2016, you will have very good performance from 2016 to 2021. If you choose new energy after 2019, you will also have very good performance.

From top to bottom, we will clearly know the macro environment we are in now and what direction we will choose in the long term. At the same time, we need to clearly see where we are. For example, we saw overseas manufacturing and the energy crisis in Europe. At this time, it is necessary to allocate some industries that benefit from the macro environment in stages. Of course, we will also dig from the bottom up. When we choose the right direction, we will definitely dig out the leading companies in this direction from the bottom up.

On the tenth anniversary of joining the company, can you share your investment insights?

Zheng Zehong: In the past ten years, the industry has undergone great changes, and many industries have experienced great growth. We have also witnessed changes in investment in different years, such as the bull market in 2014 and 2015, the circuit breaker in 2016, the bear market in 2018, and the development of the entire new energy industry in 2019 and 2021. We've definitely gone through a lot of changes. Investment is an industry that creates value, and its origin is to control risks and strive for profits.

I have always said before that the most important thing about investment is mentality, and market changes are always immeasurable. But how do we maintain our mentality during this process and strive for good returns in this fluctuation?

It is very important.

Our industry is also a relatively sacred industry. Public funds actually manage finances for the common people. If done well, they will create some benefits for the common people. However, due to some fluctuations in the market in the past two years, many Christian friends have also Even if we don't make any money, if we maintain a good attitude and use a long-term approach to investment, we will still have good results in the end.

There were certainly many bad times. Although China Energy Innovation has achieved some results in the past five years, only those who have truly experienced the fluctuations here will understand. For example, the entire epidemic situation in early 2020 The short-term fluctuations in the past have indeed had a great impact on us. At that time, we really couldn’t see what the future would be like, including the fluctuations in the past two years.

When we face big fluctuations, we still need to maintain a good attitude and sometimes stay away from the market. During the 2020 epidemic, when all kinds of assets plummeted, if you stayed very close to the market, it would be easy to make some irrational decisions. Greed and fear are human weaknesses. At this time, look up at the stars and stay a little further away from the market. , may be a good choice. At this point in time, including April this year, it may be a very difficult time for many investor friends. At this time, many people are often prone to make irrational decisions, and this is how many cuts happen at the bottom. of.

So when the market is not good, we might as well stay a little further away, think about long-term things, and do the right things in the long-term, which will help us overcome the trough period.

What qualities does an excellent fund manager need to possess?

Zheng Zehong: Fund managers are a profession that requires continuous evolution. First of all, they must have the ability to learn, which means they must constantly learn and expand. There is no one-size-fits-all investment method, and you must always evolve. The ability to evolve is very important. For example, at the beginning of this year, we found that we had misjudged the market. At this time, we need to make adjustments, negate our previous judgments, and plan new directions. Correction or iteration is always necessary for investment.

“Any investment methods and methods will change with the big cycles. There are different investment methods and methods for every big macro cycle. We must remain modest and cautious and constantly evolve ourselves.

"

The other is objectivity and truth. We must face ourselves objectively and truthfully, as well as our product net worth and customers. If we do well, we are good; if we do poorly, we are bad. , we cannot say that if we do well, we are good, and if we do poorly, it means the market is wrong. This is definitely not true. We must face ourselves and our customers objectively and truthfully.

03

"In the long run, market opportunities outweigh risks, and the cost-effectiveness of long-term investment in segmented tracks is highlighted"

What do you think of the later investment opportunities of the "New Half Army"?

Zheng Zehong: Investment is a must. Combined with the cycle, the time factor must be added to any industry.

The long-term cycle of the new energy industry is the cycle of large penetration rate. For example, the current global penetration rate of smart electric vehicles is around 10. , in the process of reaching 50 in the future, the long-term cycle may be an opportunity of three years, five years, or even ten years, but in the short-term perspective, such a view is of no use in explaining current investments.

I proposed in November last year that the mid-cycle may face fluctuations, which is called a production capacity cycle, because from 2019 to 2021, the entire new energy sector will be a cycle of supply and demand mismatch and rising volume and price. Now, production capacity in many links may have gradually come out. , so some links will face downward prices, but as demand and volume increase, I proposed last year that the new energy industry might be differentiated in the next year. The expected return rate of the new energy industry in 2020 has been too high in the past few years. It rose by 30 to 40% in 2019, nearly 100% in 2020, and another 30% to 30% in 2021. It is easy for Christians to predict linearly and think it is possible. It is unrealistic and impossible that the rate of increase will be as high as before in the future. Therefore, we proposed to lower the rate of return expectation.

But lowering the rate of return expectation does not mean that the rate of return will drop so much. , this year’s decline is indeed beyond prediction, because the new energy industry is a growth track, the industry’s growth rate is still very fast this year, the penetration rate of smart electric vehicles is still increasing rapidly, and the proportion of clean energy power generation is still increasing rapidly. After the industry index has fallen so much, the valuation of the entire sector has reached a more attractive stage. Therefore, I personally think that the new energy industry, such as electric vehicles, will have a relatively large adjustment and a relatively long adjustment time. , this position has good long-term cost performance.

At this point in time, the industry is very good in the long term, and it has reached a more attractive position in the short term. I think it is a relatively good time point.

Why are new energy vehicles selling well, but funds have been falling?

Zheng Zehong: After you see the good performance, the market may have already reflected the substantial development of electric vehicles in 2019-2021. In the past three years, the index has risen a lot, and we still see that cars are selling very well. The domestic monthly electric vehicle penetration rate is even close to 30. Many things have been reflected in the previous stock prices, because this year is not just about new energy. There have been a lot of adjustments in the industry, and many sectors of the market have fallen a lot this year. This may be related to the overall market environment.

What do you think of the upstream, midstream and downstream opportunities in the new energy sector?

Zheng Zehong: When I mentioned it in November last year, the prices of some materials in the midstream had already dropped. It is true that the prices of upstream resources have increased a lot this year, but there are not that many stocks. This year the price of lithium carbonate has reached 500,000 yuan. At this point in time, I personally think that the price of upstream resources may remain at a relatively high level, but the price of 500,000 is definitely not the norm. There will always be a downward trend at some point in the future, so at this point in time we will also make some adjustments to the positions on the upstream resource side. At this time, we will instead layout some midstream environments that only rely on volume and have no price elasticity. Because it can also enjoy good growth in volume.

At the same time, the entire vehicle segment is also a very good layout opportunity. We say that the most important sector in "China's manufacturing upgrade" is complete vehicles. First of all, complete vehicles are a very large sector and a very important sector for a country's manufacturing industry.

In the era of fuel vehicles, for example, when buying imported cars, the price may be much more expensive domestically than overseas. However, a very good phenomenon we have seen today is that in the era of smart electric vehicles, electric vehicles purchased domestically are more expensive than those purchased in Europe. Much cheaper to buy. For example, BYD can set very high prices when exporting to Europe, because its cars are so competitive in the European market. This is where we have seen the rise of our country's automobile industry after smart electric vehicles replaced fuel vehicles. . I personally think that the entire vehicle segment, including parts and components, has better opportunities later on.

How do you view the investment opportunities in photovoltaics and wind power?

Zheng Zehong: The photovoltaic industry has indeed been a very popular sector in the past few years, and many listed companies have begun to transform into photovoltaics.

From the perspective of the big cycle, photovoltaics is also a cyclical growth industry, just because its demand has been really good in recent years, which has covered up some cyclical factors. At the same time, this year has been superimposed on the European energy crisis. Household savings are increasing across Europe. Therefore, we believe that the long-term "double carbon" will definitely bring about the development of clean energy represented by photovoltaics and wind power. However, in the short-term cycle, we must also look at the factors of production capacity, such as silicon materials. The price has indeed risen in the past few years. There are a lot, but my personal judgment is that next year we will see a drop in silicon prices due to the release of silicon production capacity. The fall in silicon material prices is actually a good thing for the industrial chain. It will release all the profits to other links and stimulate the development of the entire industry. Therefore, in different links, we will also see different patterns and opportunities.

In the past, funds maintained a certain degree of exposure to coal, oil transportation and other sectors in the short cycle. How do you view these sectors?

Zheng Zehong: The best performer in the market this year is coal, which may be an industry that everyone didn’t pay much attention to before. But looking back at the industry this year amid the Russia-Ukraine conflict, the best performance was on the energy side, including old energy and the power generation side of new energy. The stock prices of some photovoltaic power generation companies exporting to European households performed very well.

The conflict between Russia and Ukraine is a very important opportunity, which has brought about the growth of high household savings in Europe and the high price of overseas coal. Looking back, traditional energy sources represented by coal and petroleum may indeed have faced insufficient capital expenditures in the past many years. The world is moving towards carbon emission reduction and carbon neutrality. This traditional industry has already experienced comparative changes. Long-term capital expenditures are insufficient, but global electricity consumption is growing. New energy cannot make up for the growing demand in the short term, thus causing an energy crisis or high prices for traditional energy. I personally believe that coal stocks have achieved good performance growth in this environment, and at the same time there has been some marginal improvement in valuation.

Although the coal sector has experienced a relatively large increase, if compared horizontally, coal stocks are still not expensive, with a valuation of only 5 or 6 times. At the same time, any money earned can be used to distribute dividends. Good companies are higher. The company's dividend yield is more than ten percent, and it is a very good asset in the entire market. Despite the European energy crisis, capital expenditures on traditional energy sources may not necessarily increase immediately. Therefore, the prices of coal stocks or traditional energy sources will remain relatively high in the future.

In fact, oil transportation literally means transportation of oil. There are container transportation and oil transportation. In the past few years, the price of container transportation has increased a lot, and the freight rates of dry bulk cargo have increased a lot. However, the price of oil transportation has increased a lot in 2020. There has been a very big rise, mainly due to the need to store oil due to the plummeting oil prices. This year, the oil transportation sector has also performed relatively well due to the vicious conflict between Russia and Ukraine. Europe may ban Russian crude oil in December in the next four quarters. , which is clearly stated in their policy. This will bring about a change, that is, the transportation distance of the entire crude oil will change. For example, Russian oil will be transported to other places, and Europe will transport oil from other places, so the lengthening of the transportation distance is what we will inevitably see next. matter. At the same time, there is also a certain degree of rigidity in the supply of tankers. In fact, it is essentially a mismatch between supply and demand. When the lengthening of the transportation distance brings about an increase in demand, but at the same time there is no corresponding increase in supply, freight prices will rise sharply. In fact, freight rates have increased significantly in the past few months, which is the core factor why we are optimistic about this sector.

04

“Looking at investment from a long-term perspective, short-term fluctuations are not losses”

How to choose industry theme funds and market-wide products?

Zheng Zehong: When the industry trend is good, thematic funds are relatively flexible, but the relative fluctuations are also large. When the industry is not good, the retracement must be large. For all-market funds, fund managers will do some risk control and control industry exposure. We will also try our best to choose better assets in different industries.

Many investors may also prefer products with relatively fast short-term growth. If you bet on the right track, the flexibility will be very good. In the past few years, products with rapid short-term growth have indeed been sought after by funds, which has led to the current industry having more thematic products. However, if the logic of the industry changes, it will face relatively large fluctuations and retracements.

How to balance the relationship between long-term layout and short-term returns?

Zheng Zehong: Nowadays, many investor friends are anxious and want to make quick money in the short term, but I have always believed that there must be a long-term concept for investment. When we have long-term understanding, Only when you face some short-term fluctuations will you be able to deal with them more calmly.

For example, when we make investments, we must first look at the long-term direction. For example, after 2000, China's houses and stocks represented by real estate may have a very long-term investment opportunity. In fact, the process it is accompanied by is the rapid increase in China's urbanization rate and the process of industrialization. This is a long-term perspective. If you look at this long-term perspective correctly, at that stage, even if you invest in houses or real estate stocks when the short-term gains are relatively high, the return rate will be very high for a relatively long period of time. Just as we are now seeing the process of smart electric vehicles replacing traditional fuel vehicles, including the process of clean energy replacing traditional fossil energy, we will see opportunities in new energy and other fields more clearly.

There will indeed be obvious fluctuations in the short term, but the long-term trend has not changed. The short-term is just fluctuations, not losses. This kind of fluctuation can be compensated for by time. In the long-term, it will continue to hit new highs. process.

Risk warning: 1. China Energy Innovation is a stock fund, and its expected risks and returns are higher than those of hybrid, bond and money market funds. The specific risk rating results are based on the rating results provided by the fund manager and sales agency. allow. 2. China Core Manufacturing and China Growth Pioneer are hybrid funds held for one year. Their expected risks and expected returns are lower than stock funds and higher than ordinary bond funds and money market funds. The specific risk rating results are provided by fund managers and sales agencies. The rating results shall prevail. 3. Some funds may invest in Hong Kong stocks and will face unique risks arising from differences in the investment environment, investment targets, market systems and trading rules under the Southbound Connect mechanism, including the risk of large stock price fluctuations in the Hong Kong stock market (the Hong Kong stock market implements T 0 Reversal trading, and there is no limit on the rise or fall of individual stocks. Hong Kong stock prices may show more severe stock price fluctuations than A shares), exchange rate risks (exchange rate fluctuations may cause losses to the fund’s investment income), trading days under the Hong Kong Stock Connect mechanism Possible risks caused by inconsistency (when the mainland market is open and the Hong Kong market is closed, Hong Kong Stock Connect cannot be traded normally, and Hong Kong stocks cannot be sold in a timely manner, which may bring certain liquidity risks), etc. 4. Some funds set a holding period for each fund share. Fund unit holders face the risk of being unable to redeem their funds before the expiration date of the holding period of the fund units (excluding the current day). 5. Before investing in this fund, investors should carefully read the fund's "Fund Contract", "Prospectus" and "Product Information Summary" and other fund legal documents, fully understand the risk-return characteristics and product characteristics of this fund, and base on Fully consider your own risk tolerance based on your own investment purpose, investment period, investment experience, asset status and other factors. Based on your understanding of the product situation and opinions on sales suitability, make rational judgments and prudent investment decisions, and bear investment risks independently. 6. The fund manager does not guarantee that the fund will be profitable, nor does it guarantee a minimum return. The Fund's past performance and its net worth do not predict its future performance, and the performance of other funds managed by the Fund Manager does not constitute a guarantee for the Fund's performance.

7. The fund manager reminds investors of the "caveat emptor" principle in fund investment. After investors make investment decisions, the investment risks caused by the operating conditions of the fund, fluctuations in the listed transaction price of fund shares and changes in the net value of the fund are borne by the investors themselves. Responsible. 8. The registration of this Fund by the China Securities Regulatory Commission does not indicate that it has made a substantial judgment or guarantee on the investment value, market prospects and income of this Fund, nor does it indicate that investing in this Fund is risk-free. 9. This product is issued and managed by China Asset Management, and the agency does not assume the responsibility for the investment, redemption and risk management of the product. 10. The opinions in this material are for reference only and do not constitute any substantive advice or commitment to investors, nor do they serve as any legal document. 11. Investors should fully understand the difference between regular fixed-amount investment of funds and lump sum withdrawals. Regular fixed-amount investment is a simple and easy investment method that guides investors to make long-term investments and average investment costs. However, regular fixed-amount investment cannot avoid the risks inherent in fund investment, nor can it guarantee investors’ returns, nor is it an equivalent financial management method that replaces savings. The market is risky and you need to be cautious when entering the market. Related questions and answers: