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 institutions, including Huaxia Fund, Harvest Fund, CCB Fund, Xingzheng Global Fund, Galaxy Fund, Invesco Great Wall Fund, and Everbright Pramerica Fund, were interviewed by the Securities Daily. They generally believe that the current volatility in the A-share market is influenced by overseas geopolitical risks and a decline in international risk appetite. In the medium to long term, Chinese assets still possess strong resilience, and structural opportunities in sectors such as technology and energy are worth looking forward to.

“Recently, due to ongoing risks in the international market, the A-share market has experienced some volatility,” a relevant person in charge of Huaxia Fund told Securities Daily. From a medium to long-term perspective, the fermentation of various risk factors is beneficial for enhancing the competitiveness of Chinese assets, and choosing to allocate funds for the long term is a better option. 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 competitiveness in the new energy market is gradually increasing, providing sufficient alternatives to international crude oil; finally, the short-term adjustments in energy supply in overseas markets cannot change the intrinsic supporting factors for the rising prices of various Chinese assets.

A relevant person in charge of Harvest Fund told reporters that the recent increase in global market volatility has led to an overall decline in risk appetite, and the A-share market has also experienced fluctuations. However, considering the valuation resilience of multiple sectors, the overall adjustment pressure on the market is expected to be limited.

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

Due to the short-term volatility in the A-share market, related assets have experienced a short-term decline in net value. Yu Hui, a senior strategy analyst at Invesco Great Wall Fund, told reporters that the short-term fluctuations in the A-share market might 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-stabilizing policies are orderly, continuous, and well-reserved, and monetary policy is diversifying its support for the market. At the same time, China’s manufacturing and supply chain systems are well-developed, showing an overall trend of stability and improvement. These favorable factors support the continuous strengthening of Chinese asset prices.

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

A relevant person in charge of CCB Fund introduced to reporters that the recent decline in the A-share market is mainly due to concerns over liquidity decline, but there is support from industry fundamentals, such as high prosperity in sectors like optical modules, photovoltaics, and energy storage, which may experience 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, adjustments in monetary policy by major global central banks; and third, the intensity of domestic policies to stabilize growth.

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

The aforementioned relevant person in charge of Harvest Fund believes that there are three directions to remain optimistic about in the medium term: first, sub-sectors in the technology growth direction that are expected to maintain upward prosperity, such as AI+ and new energy sectors; second, sectors like chemicals and non-ferrous metals that benefit from policy support; third, undervalued non-bank assets with stable profits or those that have a high cost-performance ratio due to the recovery of domestic demand, as well as consumption sectors benefiting from “investment in people.”

(Source: Securities Daily)