| scope of investment |
The investment scope of the Fund includes financial instruments with good liquidity, including stocks issued or listed in China according to law (including GEM and other stocks and depositary receipts approved or registered for listing by the CSRC), stocks listed on the Stock Exchange of Hong Kong (hereinafter referred to as "Hong Kong stocks") that are allowed to invest under the trading interconnection mechanism between the mainland and Hong Kong stock markets Bonds (including government bonds, financial bonds, local government bonds, government supported bonds, government supported institutional bonds, corporate bonds, corporate bonds, central bank bills, medium-term notes, short-term financing bonds, ultra short-term financing bonds, convertible bonds (including the pure part of separable trading convertible bonds), exchangeable bonds, publicly issued subordinated bonds, etc.) Domestic publicly offered securities investment funds (excluding Hong Kong mutual recognition funds, QDII funds FOF funds, non FOF funds of investable funds and money market funds), asset-backed securities, treasury bond futures, credit derivatives, inter-bank deposit receipts, bond repurchases, money market instruments, bank deposits, and other financial tools permitted by laws and regulations or the CSRC for fund investment (subject to the relevant provisions of the CSRC). If laws and regulations or regulatory authorities allow the Fund to invest in other varieties in the future, the Fund Manager may include them into the investment scope of the Fund after performing appropriate procedures. |
| investment strategy |
Asset allocation strategy The Fund conducts relatively stable and appropriate allocation among asset categories such as stocks, bonds, funds and cash through the combination of top-down and bottom-up, qualitative analysis and quantitative analysis, and emphasizes the organic combination of top-down macro analysis and bottom-up market trend analysis to make forward-looking decisions. The Fund's asset allocation not only considers the impact of macro fundamentals, but also the impact of market sentiment and inter-bank fund position level, and takes countermeasures according to market conditions. The asset allocation level focuses on the avoidance of systematic risk. The Fund will make investment decisions after fully measuring the risk return ratio based on the established investment strategy. Stock investment strategy In combination with quantitative and qualitative analysis, the Fund will investigate and screen individual stocks that are not fully priced and have growth potential, and establish the primary stock pool of the Fund. In terms of stock investment, the Fund will focus on bottom-up selection of individual stocks in new growth points and industries that conform to the laws of economic development, are policy driven, and promote economic restructuring, focusing on the growth and business model of the company and its industries. 1. Industry selection and configuration In terms of industry selection and allocation, three issues are focused: the cycle of economic operation, the cycle of industrial operation, and the space for industry growth. Conform to the changes in economic structure transformation, find new driving forces for economic growth, and focus on the growth cycle, growth rate and future space of the industry. 2. Competitiveness analysis In terms of the company's competitive strategy, judge the effectiveness of the strategy, the implementation support of the strategy and the implementation results of the strategy based on the results of the industry analysis; In terms of core competitiveness, analyze the company's existing competitive advantages, and judge whether the company can use existing resources, capabilities and positioning to obtain sustainable competitive advantages. The Fund emphasizes on judging the potential of future profit growth of listed companies through core competitiveness. 3. Management analysis On the basis of backward domestic regulatory system and imperfect external corporate governance structure, the fate of listed companies has greatly increased its dependence on the stability and ability of the management team. As a result, the fund manager particularly emphasizes the examination of the management's business records and management system in the investment analysis. 4. Analysis of financial indicators On the basis of financial forecast, the sustainability of the company's profit growth, the difference between the rate of return and the cost of capital, and the financial soundness of the company are judged. 5. Valuation comparison Through the selection of valuation methods and comparison of valuation multiples, select stocks with relatively undervalued prices. In terms of valuation methods, determine the key valuation methods that have the most influence on the stock price based on the characteristics of the industry; In terms of valuation multiples, through industry comparison, historical comparison and growth analysis, determine the stock price level with an upward basis. 6. Trading strategy Through detailed basic research and follow-up tracking, we can reasonably determine the trading price range of investment targets and reduce the randomness of transactions. 7. Stock investment strategy of Hong Kong Stock General Standard The Fund will fully tap the investment opportunities in the A-share market and Hong Kong stock market under the trading interconnection and two-way capital flow mechanism between the mainland and Hong Kong stock markets. The specific investment strategy is as follows: First, through the self-developed multifactor quantitative model for Hong Kong stocks, which is dominated by fundamental factors, and taking the stocks of Hong Kong stocks as the stock selection pool, we will select the stocks with high factor scores according to the actual needs such as market liquidity and product scale to build a quantitative and optimal combination of Hong Kong stocks. Second, for companies listed in two places at the same time, examine their discount and premium levels to find H-share targets with abnormal discount or more stable valuation and volatility than A-shares. Third, investigate the industry attributes and business models of Hong Kong stocks, and look for low valuation and growth targets in industries where A-shares have no corresponding targets for the time being. The Fund will continue to track the relative valuation and market conditions of the A-share market and the Hong Kong stock market, and adjust the investment proportion of the portfolio of Hong Kong Stock Connect in due course. 8. Investment strategy of depositary receipts The Fund will invest in depositary receipts according to the investment objectives and stock investment strategies of the Fund and based on in-depth research and judgment on the investment value of the underlying securities. Fund investment strategy The Fund invests in the equity securities investment fund managed by the Fund Manager and the stock exchange type open-ended index securities investment fund of the whole market. The equity securities investment funds invested by the Fund include stock funds and hybrid funds that meet at least one of the following criteria: (1) The proportion of stock assets agreed in the fund contract to fund assets shall not be less than 60%; (2) The share assets disclosed in the latest four quarterly reports of the Fund account for no less than 60% of the Fund's assets. According to the judgment of the current macroeconomic situation, select the fund varieties with relatively high value to invest from top to bottom. The core objective of fund selection is long-term sustainable excess return capability. The combination of quantitative analysis and qualitative analysis is adopted. On the one hand, the targets with relatively prominent investment value are screened through quantitative rules, and on the other hand, the secondary research and judgment of funds are conducted through qualitative methods, and the matching portfolio investment strategies are screened together from multiple dimensions, which are suitable for portfolio participation. 1. Active Fund Investment Strategy The Fund adopts a top-down strategic framework for the allocation of active equity funds and hybrid funds. First, based on the overall judgment of the market, determine the type and direction of the proposed investment, screen out the funds that meet the investment requirements from the optional targets, and focus on the allocation tendency, performance contribution and income stability of the funds in the industry style. During specific screening, the Fund will conduct a comprehensive evaluation on the optional funds by combining quantitative analysis and qualitative analysis, and select the products with the highest evaluation as the alternative investment funds. In terms of quantitative research, comprehensive evaluation is mainly conducted from multiple perspectives such as product scale change, performance stability and performance attribution analysis, and funds with stable style, good performance and sustainable performance are selected as alternatives. In terms of qualitative research, through the analysis of the fund's management scale, investment research support, investment logic, benchmarking, risk control ability and other factors, combined with the investigation of fund managers, make a comprehensive judgment. In addition, the Fund will further select suitable targets for investment based on the asset allocation plan and comprehensive consideration of investment costs, liquidity and relevant legal requirements. 2. Passive fund investment strategy The Fund adopts a top-down strategic framework for the allocation of passive funds. First, based on the overall judgment of the market, determine the variety and direction of the proposed investment, and analyze the performance of the underlying index, tracking error, excess return, scale change and other quantitative aspects, and select the funds that have stable performance and meet the market direction. In addition, the investment quota shall be determined by considering the liquidity level, rate level, market representativeness, risk control ability of the manager and other factors in combination with its own investment strategy. Investment strategy of fixed income assets such as bonds The investment strategies of fixed income assets such as bonds adopted by the Fund include: term structure strategy, credit strategy, swap strategy, interest margin strategy, convertible bond investment strategy, exchangeable bond investment strategy, etc. 1. Term Structure Strategy By predicting the shape and change trend of the yield curve, the duration of various types of bonds is allocated. The specific strategies are divided into riding strategies that track the yield curve and bullet strategies, barbell strategies and ladder strategies based on the change of the yield curve. 2. Credit strategy The yield of credit bond is equal to the benchmark yield plus the credit spread. The yield of credit spread is mainly affected by two aspects: one is the market average credit spread curve trend of the credit bond corresponding to the credit level; The second is the credit change of the credit bond itself. Based on these two factors, the Fund Manager adopts the following two strategies: (1) Based on the change strategy of credit spread curve: first, analyze the impact of economic cycle and related market changes on the credit spread curve; second, analyze the impact of the change trend of credit bond market capacity, structure, liquidity, etc. on the credit spread curve; finally, integrate various factors, analyze the overall trend of the credit spread curve and the trend of different industries, and determine the total investment proportion of credit bonds and different industries. (2) Based on the credit change strategy of credit bonds: after the issuer's credit changes, we will use the credit spread curve corresponding to the changed bond credit rating to price corporate bonds and corporate bonds. The factors affecting the credit risk of credit bonds include industry risk, company risk, cash flow risk, asset liability risk and other risks. We mainly rely on the internal rating system to analyze the relative credit level, default risk and theoretical credit spread of credit bonds. When the Fund invests in credit bonds (including asset-backed securities, the same below), it invests in credit bond assets rated above AA (including AA), and the allocation proportion of credit bonds of each rating is shown in the following table: Ratings of the invested credit bonds Proportion of the rated credit bonds in credit bond assets AAA 50%-100% AA+ 0%-50% AA 0%-20% The credit rating of the Fund's investment credit bonds mainly refers to the credit rating of the entity in the latest fiscal year. If there is no entity rating, refer to the debt rating. If the issuer is rated by two or more domestic rating agencies at the same time (excluding China Bond Credit Rating Co., Ltd.), the lower one shall be adopted to determine its rating; During the period when the fund holds the above credit bonds, if the relevant credit rating declines and no longer meets the above criteria, it shall be adjusted to meet the fund contract within 3 months from the date of the rating report. 3. Swap strategy Different securities have differences in interest, default risk, duration, liquidity, tax and derivative terms. Fund managers can buy and sell two or more securities with similar characteristics at the same time to earn income differentials. 4. Margin strategy Through positive repo, financing can buy bonds whose yield is higher than the repo cost, so as to gain leverage gain. 5. Investment strategy of convertible bonds and exchangeable bonds The Fund uses macroeconomic changes and earnings changes of listed companies to judge the changing trend of the market, select different industries, and then select different types of convertible bonds in different industries according to the characteristics of convertible bonds. The Fund uses the bond base price and yield to maturity of convertible bonds to judge the debt nature of convertible bonds and enhance the relative security of principal investment; Use the premium rate of convertible bonds to judge the equity of convertible bonds. When investment opportunities appear in the market, give priority to the varieties with strong equity to obtain excess returns. The shares that can be exchanged for exchangeable bonds during the share exchange period are the shares of other listed companies (hereinafter referred to as "target companies") held by the issuer. Exchangeable bonds also have the characteristics of stocks and bonds. Among them, bonds have the same characteristics as convertible bonds, which refer to the coupon interest and face value obtained from holding to maturity. The stock characteristics refer to the growth ability and profitability of the target company and the growth of the target company's stock price. The Fund will conduct comprehensive investment decisions through research and analysis on the pure bond value of exchangeable bonds and the stock value of the target company. Investment strategy of restricted circulation securities The Fund will reasonably control the proportion of restricted negotiable securities invested by the Fund according to the net capital scale of the Fund Manager, the investment style and liquidity characteristics of the Fund, and taking into account the safety, liquidity and profitability of the Fund's investment. Strategies for purchasing credit derivatives to avoid credit risk of individual bonds Relying on the overall credit research team of the company, when a bond is expected to have a high default risk, you can purchase the credit derivatives of the corresponding bonds to control the credit risk impact of the underlying bonds. The Fund participates in credit derivatives trading for the purpose of risk hedging in accordance with the principle of risk management, and will try to keep the nominal principal of credit derivatives consistent with the face value of the corresponding underlying bonds according to the actual situation. |