Recently, under the stimulus of significant policy benefits, the A-share market has seen a broad upward trend, with Chinese assets collectively strengthening. In the fourth quarter, the investment strategies of public fund institutions have become a widely discussed topic in the market.

During research, China Securities Journal reporters found that the investment enthusiasm conveyed by many public fund companies has generally increased, with core assets such as consumer goods and securities in the A-share market being highly favored. They believe that the A-share market is expected to usher in a new round of repair trends. However, some fund companies have also indicated that in terms of investment structure, the market performance may also show a phased differentiated performance.

Investment enthusiasm has increased

Since September 24, the three major A-share indices have shown significant gains. In just five trading days, the Shanghai Composite Index has risen by more than 20%, the Shenzhen Index has risen by more than 30%, and the ChiNext Index has risen by more than 40%. On September 30, the total market turnover exceeded 2.6 trillion yuan, setting a new historical record for the single-day turnover of A-shares.

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With the support of several consecutive positive lines, the emotions of investors from all walks of life have warmed up rapidly. Public fund institutions are no exception. A group of public fund companies have actively spoken out for a long time and revealed a positive attitude towards the market.

Southern Fund believes that the recent market performance has effectively boosted market sentiment and attracted the attention of funds outside the market. If subsequent fiscal and monetary policies are effectively implemented, the overall profitability of A-shares is expected to improve. Investors are advised to maintain a positive attitude and participate in opportunities.

Jingshun Great Wall Fund stated that considering the gradual introduction of stimulus policies and the market has entered a short-term oversold state, it is relatively optimistic about the future market performance.

Zhong Ou Fund stated that after carefully examining recent policy trends and market reactions, a more positive outlook can be made on the subsequent trend of the A-share market. After several consecutive days of rising, the stock market is returning to a reasonable value, showing the market's positive attitude towards policy reactions. It is expected that in the future period, as policies are gradually implemented and incremental policies are promoted, the A-share market is expected to emerge from the downturn of the past three years and usher in a new stage of development.

Morgan Stanley Fund believes that based on the unexpected introduction of policies in this round, market confidence is expected to be greatly boosted. The A-share market may have ended its phased bottoming out and is expected to usher in a new round of repair trends. It is expected that the fourth quarter will become a dense period for policy implementation, and future fiscal policies are expected to exert strength, and A-shares will continue to be catalyzed by policies.

Hang Seng Qianhai Fund believes that the recent introduction of a number of supporting policies has supported the capital market from the perspective of liquidity, clarified the guarantee of incremental funds, and the policy has a more positive tone on the economy. This has a more direct support for boosting market confidence and investor sentiment, which are the denominators of valuation.Golden Eagle Fund believes that on the last trading day before the National Day holiday, a large number of investors are still actively pouring into the stock market, reflecting an unprecedented surge in market sentiment. It is expected that after the National Day holiday, the risk appetite in the A-share market is still likely to remain at a high level. After the current index volume surge, it has significantly broken through the previous downward channel pressure, and the A-share market is ushering in a golden period of rapid investor confidence repair.

Multiple fields are attracting attention

Against the backdrop of the belief that the market is expected to break out of a new trend and investment can be more active, which specific investment fields do public institutions prefer? Overall, core assets including consumption and finance, as well as the Hong Kong stock market, are more favored.

The so-called core assets mainly refer to companies that have core competitive advantages in various fields, have a good long-term supply and demand pattern, and can form a sustainable profit trend. Generally, they are leading companies in each industry.

Morgan Stanley Fund directly stated that it is optimistic about the overall trend of China's core assets, and fields that have been suppressed by pessimistic expectations are also expected to usher in valuation repair. Nanfang Fund also said that in terms of investment structure selection, it is optimistic about the core assets of A-shares and Hong Kong stocks in the medium and long term.

The investment logic behind the consumption sector is mostly due to the rebound from oversold and policy stimulus. Jing Shun Great Wall Fund believes that in the subsequent investment layout, it is recommended to pay attention to three directions: first, the opportunity for oversold rebound and valuation repair, including but not limited to the real estate chain, medicine, some consumer goods, media, etc.; second, the direction of growth that has entered the right side of the basic face, or there are potential policy benefits, such as the semiconductor industry chain, consumer electronics, information innovation; third, some large-cap stocks that have fallen a lot before but belong to the core components of the main broad-based index.

Zhong Ou Fund believes that in terms of investment direction, it is recommended to pay attention to two directions: first, industries with good business trends in the next one or two years, these industries have been undervalued in the past, and there is a large room for valuation improvement after the market sentiment turns good; second, industries that benefit from the current economic policy, especially industries related to policies that promote domestic demand and improve people's livelihood, such as consumer and service industries related to home appliances, automobiles, elderly care, and childbirth.

For the financial sector, Zhang Junxiao, the head of the total cycle group of Penghua Fund Research Department, believes that at the industry level, the benefits for each major financial industry are more direct: insurance directly benefits from risk pricing repair, leading securities firms benefit indirectly from the opening of leverage space, and banks maintain a relatively neutral net interest margin. Golden Eagle Fund believes that the non-bank financial sector will greatly benefit from the obvious improvement in trading volume.

In terms of the Hong Kong stock market, Zhang Junxiao believes that compared with the A-share market, the Hong Kong stock market has greater flexibility in the numerator and denominator. Hang Seng Qianhai Fund believes that the Hong Kong stock market is more sensitive to growth repair and policy signals, and the flexibility is expected to be greater. Guotai Fund Zhang Ronghe believes that there are signs of improvement in both the numerator and denominator of the Hong Kong stock market, the overseas risk-free interest rate has decreased, and there are signs of improvement in corporate earnings in the numerator, so the performance of the Hong Kong stock market will be relatively better.

The market may be differentiated in stagesWhile focusing on the aforementioned sectors, some public mutual fund companies have also indicated that different sectors may take the lead in different periods. The logic of market trends may manifest as short-term consumer and other oversold sectors gaining strength, with long-term opportunities lying in core assets, dividends, high-quality growth, and other directions.

Huaxia Fund stated that with the surge in investment sentiment, the market may still be in a bullish range after the holiday. However, a rapid increase may to some extent overdraw the space for a comprehensive rise, and the market is inevitably going to diverge. If we perform an attribution analysis of the market trend, there is not much change in the short-term fundamentals, mainly due to policy-driven investor expectations reversing the valuation repair market. Therefore, the tracks with the most pessimistic market sentiment and the largest decline have a greater rebound space. As capital gradually returns to rationality from impulsiveness, it will focus more on the fundamentals, and the prosperity index can best gather consensus among funds. At present, the technology sector has a superior prosperity index. Under the new quality of productive forces in the intelligent trend, including AI consumer electronics, intelligent driving, intelligent robots, and other fields, there is a larger space and a longer view.

Nanfang Fund stated that in terms of investment structure, it has a long-term optimistic view of the core assets of A-shares and Hong Kong stocks, that is, high-quality leading companies, corresponding to assets such as A50 and Hang Seng Technology; in the short term, sectors such as consumer goods and real estate industry chains that have fallen more before may have greater elasticity in the short-term rebound.

Qianhai Kaiyuan Fund believes that structurally, the cyclical consumption and real estate chains that benefit from improved policy expectations will have greater elasticity in the short term. However, considering that the repair of economic demand still needs to be verified, the style with a smoother medium-term logic after policy catalysis is still in the high dividend dividend and undervalued growth areas.

Golden Eagle Fund believes that in terms of industry allocation, the short term can still focus on oversold rebound sectors. When A-shares are oversold and repaired, sectors that have fallen more before, such as those leaning towards domestic demand, are expected to lead the rise. The non-bank sector will greatly benefit from the significant improvement in trading volume, and the high-elasticity TMT sector will significantly benefit from the promotion of risk preference.

Nuoan Fund stated that it currently recommends continuing the dividend plus going overseas as the base position, and waiting patiently for signals. Dividend low-wave assets continue to focus on hydropower and nuclear power, and property insurance with stable premium growth. Excellent companies in the overseas sector have re-acquired configuration value, focusing on sectors such as machinery, home appliances, and commercial vehicles. Subsequently, as policy, price, and external three major signals are gradually verified, it is expected that the focus of configuration will shift to high-quality growth and domestic demand sectors.

Zhongke Wotu Fund believes that from the perspective of market rhythm, after the introduction of policies, the first to rebound will be the sectors with strong macroeconomic sectors such as consumption and cyclical sectors that have been suppressed by low expectations before. However, the stabilization and recovery of the macroeconomy have never been achieved overnight, and the transition from the market bottom to the economic bottom also requires time. After the market has experienced the first wave of significant rebound after the holiday, it may diverge. Themes with better fundamentals such as pan-technology, automobiles, and energy may continue to strengthen based on their fundamental advantages.