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, China Construction Bank Fund, XINGZheng Global Fund, Galaxy Fund, FT Fund, and Everbright Pramerica Fund, accepted an interview with the Securities Daily. They generally believe that the current round of A-share market fluctuations 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 structural opportunities in sectors such as technology and energy are worth looking forward to.

“Recently, due to the continued impact of international market risks, the A-share market has experienced some volatility,” said a relevant business leader from Huaxia Fund to the Securities Daily. 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 allocation 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 pose a long-term impact on Chinese assets; second, China’s new energy market competitiveness is gradually increasing, providing sufficient alternatives to international crude oil; finally, short-term adjustments in overseas energy supply do not change the inherent supporting factors for the 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. The A-share market has also experienced some fluctuations, but considering the valuation resilience of multiple sectors, it is expected that the overall adjustment pressure on the market will be limited.

Qian Xin from XINGZheng Global Fund Management Department stated that China’s energy market is relatively diversified and, benefiting from the “dual carbon” strategy, the electrification level in our country has rapidly increased in recent years, leading to a decrease in dependence on oil. From a fundamental perspective, there have been no fundamental changes in our economy; therefore, the impact on the financial market will not be very significant, and related asset prices are expected to maintain a strong momentum in the future.

Affected by the short-term fluctuations in the A-share market, the net value of related assets has experienced a pullback. Yu Hui, a senior strategy analyst at FT 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 and more stable environment. For example, growth stabilization policies are orderly, continuous, and well-reserved; monetary policy is diversified in supporting the market. At the same time, China’s manufacturing and supply chain systems are complete, showing an overall trend of stability and improvement. These favorable factors support the continuous strengthening of Chinese asset prices.

In the view of several public fund institutions, structural opportunities are still expected to emerge in the future market. A relevant person from Galaxy Fund told reporters that current international market risks are concentrated in resource products, and the trading logic is oscillating between repair and risk aversion. Due to the release of risks in the A-share market, significant structural opportunities will emerge in sectors such as coal and oil and petrochemicals in the future.

A relevant business leader from China Construction Bank Fund introduced to reporters that the recent decline in the A-share market is mainly due to concerns over decreased liquidity, but industry fundamentals provide support. For example, sectors with high prosperity such as optical modules, photovoltaics, and energy storage may welcome event catalysts. In addition, the banking sector, as a high-dividend variety, is also worth attention. The future should focus on tracking three core variables: first, the evolution of the overseas situation; second, adjustments in the monetary policies of major global central banks; and third, the strengthening of domestic growth stabilization policies.

A relevant person from Everbright Pramerica Fund’s equity research department told reporters that the current loose funding environment in the A-share market is expected to continue, and the allocation strength of funds to assets such as banks is expected to recover, which will provide support for medium to long-term market liquidity. In terms of asset allocation strategy, the current defensive strategy is still worth emphasizing, and mid-term attention can be paid to bond market opportunities such as narrowing term spreads.

The aforementioned relevant person from Harvest Fund believes that in the medium term, three directions are still favored: first, sub-sectors within the technology growth direction that are expected to maintain an upward trend, such as AI+ and new energy sectors; second, sectors such as chemicals and non-ferrous metals that benefit from policy efforts; third, non-bank assets that are undervalued, have stable profits, or are highly cost-effective due to the recovery of domestic demand, as well as consumer sectors that benefit from “investment in people.”

(Source: Securities Daily)