In the third quarter, the A-share market experienced an initial rapid rise and fell into shock. After the growth and blue-chip valuation diverged to a certain extent, the market style also showed a "rebalancing" trend. Growth assets such as medicine and biology, which had a large increase in the previous period, made a significant correction, while the pro-cyclical sector had significant excess returns under the expectation of economic recovery.

Fund managers' investment emphasizes "conforming to the trend". A number of star fund managers said in the three quarterly reports that although they still maintained the allocation of core assets such as science and technology and medicine, they appropriately increased their holdings of undervalued products such as large manufacturing and finance in the portfolio. In the long run, we are still more optimistic about the sustainable value creation ability of high-quality enterprises.

There may be some problems in the future.

Valuation contraction pressure

Since the beginning of this year, the valuation differentiation market continues to interpret. Liu Yanchun, star fund manager of Jingshun Great Wall, said that in the third quarter, economic operation is gradually normalizing, the liquidity environment is bound to change, and the market may face certain valuation contraction pressure in the future. China's asset prices recover faster than the production side, and the rise has certain bubble characteristics. For a long time in the future, the capital market should be carefully calculated and dealt with carefully.

Zou Xi, deputy general manager and equity investment director of the financing Fund, said that the market will move from the "virtual world" of liquidity promotion + thinking inertia to the "real world" of profit-driven + valuation matching. investment opportunities must be grasped at a reasonable valuation level according to corporate earnings growth and sustainability. For quite a long time after the third quarter, pro-cyclical style will become the main line of the A-share market.

Yinhua domestic demand mix Liu Hui also expects the fourth quarter financial, cycle and other undervalued sectors may have a phased market. He in the quarterly report for the fourth quarter to continue to maintain the shock city judgment, "may need to properly consider the 'big finance, big cycle' direction of the existence of phased opportunities." If there are periodic opportunities for assets in this direction, the index is likely to show a periodic trend.

Zhou Yingbo, a pioneer fund manager in the China-Europe era, continued to maintain a stable position in the third quarter, but made structural adjustments. "on the whole, we are very vigilant against the extreme situation of market valuation differences in the industry, and pay attention to balance in industry allocation and stock selection. On the one hand, some leading companies in traditional industries that have benefited from the economic recovery have been strengthened. For many industries, the epidemic has further accelerated the process of survival of the fittest, and the advantages of traditional industry leaders with outstanding competitiveness in all aspects have been further expanded; on the other hand, they continue to focus on promising business industries, such as cloud computing, new energy vehicles, 5G applications (electronics and media), and medical services. "

Those who are optimistic about high-quality leading enterprises

Value creation

Although the style balance of the position portfolio will be considered in the short term according to the market valuation, in the long run, a number of star fund managers are firmly optimistic about the long-term investment value of high-quality enterprises.

Fu Pengbo, manager of Ruiyuan growth value Fund, said that in the third quarter, we can see that in the process of this round of profit differentiation and industry concentration, the voice of the industry chain or the same industry has been improved to a certain extent. this fully proves the forward-looking and subjective initiative of excellent entrepreneurs when they experience macro or industry fluctuations, and the extraordinary competitiveness shown by entrepreneurs is also the source of position confidence. Looking forward to the fourth quarter, macro and monetary policy guidance, changes in the international environment have become the focus of investment, will still pay more attention to high-quality enterprises, through the balance of positions to ensure the smooth operation of the portfolio.

Zhang Kun, manager of Yifangda Blue Chip Select Fund, said that he will continue to hold high-quality companies with excellent business model, clear industry pattern and strong competitiveness for a long time. He believes that the impact of the epidemic on domestic economic activities is coming to an end. Over the past eight months or so, the epidemic has accelerated the development trend of many industries themselves, shortening the development process that might have taken two or three years to a few months, such as e-commerce, online local services, online education, and so on. In addition, enterprises in most industries are faced with a stress test, which examines their past accumulation and internal skills in an all-round way. Most industries have achieved survival of the fittest, and the degree of concentration has been further enhanced. In the era of mobile Internet, the transmission speed of information is getting faster and faster, and the speed of head enterprises to gain competitive advantage is faster and stronger than in the past.

Zhu Shaoxing, manager of Fuguo Tianhui Fund, said in the third quarterly report that companies with good "corporate genes", that is, enterprises with sound corporate governance structure and excellent management, are more likely to create value for investors in the future. Sharing the capital market gains brought by the enterprise's own growth is the best way for growth funds to get returns.

Yang Hao, the new vitality fund manager of BoCom, is more optimistic about the high-quality leading enterprises in the field of new retail and industrial reengineering. He said in the quarterly report that for the manufacturing industry, in addition to the improvement of the efficiency of the supply chain, agile production is expected to enable excellent enterprises to break through inventory restrictions and other factors, and have the opportunity to build platform companies of the industrial Internet. Compared with the good track companies with high certainty but high valuation, they prefer to invest in some good management companies that constantly break through themselves.