The seven major public fund managers discuss the market: A-shares remain resilient in the medium to long term, and structural opportunities are worth looking forward to

Recently, the A-share market has shown significant volatility. On March 24, seven major public fund institutions, including Huaxia Fund, Harvest Fund, CCB Fund, Xingsheng Global Fund, Galaxy Fund, Puyin Fund, and Everbright Pramerica Fund, were interviewed by Securities Daily reporters. They generally believe that the current round of volatility in the A-share market is influenced by overseas geopolitical risks and a decline in international risk appetite. From a medium- to long-term perspective, Chinese assets still exhibit strong resilience, and there are structural opportunities worth looking forward to in sectors such as technology and energy.

“Recently, influenced by ongoing risks in the international market, the A-share market has experienced some fluctuations,” said a relevant business leader from Huaxia Fund to Securities Daily reporters. From a medium- to long-term perspective, the fermentation of various risk factors is conducive to enhancing the competitiveness of Chinese assets, and a long-term layout of funds is a better choice. First, China’s dependence on international crude oil is relatively low, and the current overseas situation is insufficient to impose long-term effects on Chinese assets; second, the competitiveness of China’s new energy market is gradually improving, providing sufficient alternatives to international crude oil; finally, short-term adjustments in overseas energy supply cannot alter the inherent supporting factors for rising prices of various Chinese assets.

A relevant person from Harvest Fund told reporters that recently, global market volatility has increased, and overall risk appetite has declined, leading to some fluctuations in the A-share market. However, considering the valuation resilience of multiple sectors, the overall adjustment pressure on the market is expected to be limited.

Qian Xin, from the management department of Xingsheng Global Fund, stated that China’s energy market is relatively diversified. Benefiting from the “dual carbon” strategy, the degree of electrification in the country has rapidly increased in recent years, leading to a decreased reliance on oil. From a fundamental perspective, there has been no fundamental change in China’s economy; therefore, the impact on the financial market will not be significant, and asset prices are expected to maintain a strong momentum in the future.

Due to the short-term fluctuations in the A-share market, the net value of related assets has experienced a correction. Yu Hui, a senior strategy analyst at Puyin Fund, told reporters that the short-term fluctuations in the A-share market may be brewing better allocation opportunities. From a fundamental perspective, China has a solid economic foundation and a safer, more stable environment. For instance, growth stabilization policies are orderly, continuous, and well-reserved, and monetary policy is diversified in its support for the market; at the same time, China’s manufacturing and supply chain systems are完善, showing an overall stable and improving trend, all of which support the continuous strengthening of Chinese asset prices.

Several public fund institutions believe that structural opportunities will still emerge in the future market. A relevant person from Galaxy Fund told reporters that the current international market risks are concentrated in resource products, and the trading logic is oscillating between repair and risk aversion. As risks in the A-share market have been somewhat released, significant structural opportunities are expected to arise in sectors such as coal and petrochemicals in the future.

A relevant business leader from CCB Fund informed reporters that the recent decline in the A-share market is mainly due to concerns about decreased liquidity. However, there are supporting fundamentals in the industry, such as the high prosperity of sectors like optical modules, photovoltaics, and energy storage, which may welcome event-driven catalysts. Additionally, the banking sector, as a high-dividend category, is also worth paying attention to. Moving forward, it is essential to closely monitor three core variables: first, the evolution of the overseas situation; second, the monetary policy adjustments of major global central banks; third, the intensity of domestic growth stabilization policies.

A relevant person from Everbright Pramerica Fund’s equity research department told reporters that the current loose funding situation in the A-share market is expected to continue, and the allocation power of funds to assets like banks is likely to recover, which will support medium- to long-term market liquidity. Regarding asset allocation strategies, the current defensive strategies are still worth emphasizing, and in the medium term, opportunities in the bond market, such as narrowing term spreads, can be focused on.

The aforementioned relevant person from Harvest Fund believes that the medium term still favors three directions: first, sub-sectors in the technology growth direction that are likely to sustain upward momentum, such as AI+ and new energy sectors; second, sectors like chemicals and non-ferrous metals that benefit from policy efforts; and third, non-bank assets with low valuations and stable profits or those that have high cost-performance ratios due to domestic demand recovery, as well as consumer sectors benefiting from “investment in people.”

(Source: Securities Daily)