Quarter-end fund rebalancing triggers a market shift? Industry insiders: Style rebalancing is more likely.

ME AI News: As the end of the second quarter is approaching, market discussions about issues such as how end-of-quarter rebalancing by open-end funds may trigger a shift in market sentiment have been increasing.

In response, a reporter reached out to industry institutions and learned that, this year, most open-end fund companies have tightened risk-control management for sector-themed funds even further, especially when it comes to style drift. For fund managers, this is now an option with very low cost-effectiveness.

An equity quant analyst at a public fund firm in Shanghai noted that the market has indeed recently seen style rebalancing. However, today the Technology Growth sector saw some of those positions being replenished. Judging from this adjustment, it may be because some all-market stock-picking funds do not want to reflect an overly extreme positioning style in their quarterly reports, so they took style rebalancing steps in advance. But excessive rebalancing may also result in insufficient exposure to Technology Growth, which then leads to subsequent replenishment.

(China Securities Jinniuzuo) (Source: Wall Street Insight)