Summary of Key Points
This year, the semi-annual reports of public funds for the first time included a new indicator: the "proportion of profitable investors," which reveals the truth behind the situation where funds may be making money, but not the investors who own them. Some funds have over 99% of their investors making a profit, while others see a net value increase of more than 60% yet only 15% of investors profit. This difference stems from investors' tendency to chase rising prices and sell when prices fall. Additionally, there is a divergence in the preferences of fund managers for their "hidden heavyweight stocks": Fu Pengbo focuses on new technology stocks, while Jiang Cheng sticks to traditional, value-oriented stocks and also invests in new offerings. Due to the scarcity of growth opportunities in new stocks, they have become a hot topic in fund portfolios. This new indicator will also drive the industry to shift from a focus on selling products to managing wealth for investors.
1. The New Indicator Reveals the Truth: Funds Making Money Does Not Necessarily Mean Investors Are Making Money
This year's semi-annual reports clearly show that when people invest in the same fund, some make a profit and some lose money, with the difference being staggering. For example, the net value of the Galaxy Value Growth Hybrid A increased by 68.57% (meaning a 68% return on a 100 yuan investment), but only 15.51% of the investors actually made a profit. In contrast, 99.68% of the investors in the Ruiyuan Growth Value Hybrid fund made a profit.
Previously, we only looked at whether the fund's net value had increased. This new indicator breaks the illusion that a fund's profitability directly translates to investors' profits—it all depends on when you buy and when you sell.
2. Why Do Some Funds Have High Profit Rates While Others Have Low Ones? Chasing Rising Prices and Selling When Prices Fall Is the Culprit
The main reason for this difference lies in investors' behavior:
- Chasing Rising Prices and Selling When Prices Fall Leads to Losses: For instance, no one buys into technology funds when they are at low prices, and when the market heats up, everyone rushes in, buying at high prices. As soon as the market declines, those who bought in at high prices suffer losses. For example, the net value of the Mingya Value Changqing Hybrid increased by 30%, but most investors bought in at those high prices, resulting in only a 13% profit rate.
- Long-Term Holding Is the Key to Success: Funds that require a one-year or three-year holding period force investors to hold on, which leads to higher profit rates (for example, the Galaxy Growth Preferred Hybrid has a profit rate of over 95% for those who held for a year).
Fund managers point out that if the fund company does not suspend new subscriptions at high prices in time, later investors are likely to lose money, widening the gap between the fund's net value and the actual returns for investors.
3. A Closer Look at Hidden Heavyweight Stocks: Fu Pengbo Invests in New Stocks, Jiang Cheng Sticks to Traditional Stocks
"Hidden heavyweight stocks" refer to the 11th to 20th largest positions in a fund's portfolio, which reveal the managers' true preferences:
- Fu Pengbo's Focus on New Technology: His Ruiyuan Growth Value Hybrid fund includes Lianxun Instruments, a newly listed stock that became a top performer this year, in its portfolio, and it also reduced its holdings in some high-performing technology stocks (such as Dongshan Precision) to lock in profits.
- Jiang Cheng's Preference for Traditional Stocks: His Zhongtai Flexible Allocation Hybrid fund still focuses on traditional industries like finance and consumer goods, with most of its hidden heavyweight stocks being traditional ones. However, he invested in 23 new stocks in the first half of the year. He believes that while traditional industries may grow slowly, he is more concerned about companies losing their competitiveness (what he calls a "value trap").
4. Why Do Funds Prefer Investing in New Stocks?
The enthusiasm for investing in new stocks is high this year. For example, Jiang Cheng invested in 23 new stocks, and Fu Pengbo bought Lianxun Instruments. The reasons are simple:
- New Stocks Offer Good Growth Potential: Under the registration-based system, new stocks are often in sectors like semiconductors, innovative drugs, and advanced equipment, which have significant growth potential in contrast to traditional industries.
- Low Risk and High Flexibility: New stocks have dispersed ownership when they first list, and if their performance is solid, their prices can rise significantly. Funds can invest a small portion of their portfolio in these stocks, minimizing losses and potentially gaining higher returns.
5. The New Indicator Forces an Industry Transformation: From Selling Funds to Helping Investors Make Money
The "proportion of profitable investors" indicator is not just for show; it will transform the entire industry:
- It Encourages Long-Term Investing: Fund companies will no longer just advise you on which funds to choose but will encourage regular investments and long-term holding, as short-term trading is more risky.
- Greater Focus on Investor Returns: Companies will now be more focused on investors' actual returns, shifting from selling products to managing their wealth.
In short, the focus of the fund industry will shift from making funds profitable to helping investors make money, which is good news for ordinary investors.
Conclusion: This new indicator reminds us that when buying funds, we should not just look at how much the net value has increased but also control our own investment behavior and avoid chasing rising prices and selling when prices fall. When selecting funds, we should also consider those with a high proportion of profitable investors, as they are likely to perform better. Additionally, understanding a fund manager's preferences for hidden heavyweight stocks and new stock investments can help us understand their investment strategies.