The current investment landscape is witnessing significant positive changes at the macroeconomic level, which have started to bolster support for market bottoms. As per the insights from the investment director and fund manager Shen Kun of Fuanda’s equity investment department, while there has been a notable divergence between the performance of large and small-cap stocks—with the latter experiencing greater declines last week due to delisting concerns and waning market risk appetite—the overarching economic trends are quite favorable.
Shen emphasizes the importance of focusing on the positive transitions within the industry sector over the macroeconomic conditions. Among the noteworthy industry-level developments is the establishment of the National Integrated Circuit Industry Investment Fund Phase III (National Big Fund Phase III) on May 24, which suggests an accelerated pace for domestic semiconductor advancement with its increased registered capital compared to previous phases.
Further fueling optimism in terms of industry innovation, Apple’s recent announcement at the Worldwide Developers Conference (WWDC24) introduced significant updates and collaborations, including the new “Apple Intelligence” suite and a partnership with OpenAI. These advancements are expected to trigger replacement waves for AI smartphones and AI PCs, as well as boost the demand for computing power.
Moreover, the livestock sector is showing promising signs with the continuous rise in pork prices. Looking ahead, Shen remains optimistic about the mid-term market outlook. He advocates a balanced approach to investing, with a focus on industries exhibiting upward trends—such as computing power, consumer electronics, and livestock—alongside assets with high dividends and ROE, and sectors that have been underrepresented in institutional portfolios but have cyclically low stock prices.
It should be noted that these perspectives reflect Shen Kun’s personal investment focus and do not necessarily represent the fund’s investment direction or industry allocations, and are not to be taken as investment advice.
Key Questions and Answers:
– What are the signs of positive shifts in the macro economy?
Signs of positive shifts include favorable economic trends, the establishment of the National Integrated Circuit Industry Investment Fund Phase III, growth in industry innovation, and continuous rise in pork prices, all suggesting potential for growth in equity markets.
– How are global tech developments affecting the market?
Announcements such as Apple’s at WWDC24 indicate major updates and collaborations which may lead to increased demand in the tech sector, potentially driving growth in equity markets tied to these technologies.
– What is the recommended investment strategy according to Shen Kun?
Shen Kun advocates for a balanced investment approach, focusing on trending industries like computing power, consumer electronics, and livestock, along with assets that provide high dividends, ROE, and are underrepresented in institutional portfolios but priced cyclically low.
Key Challenges and Controversies:
– The market performance of large vs. small-cap stocks can be a challenge, as they can respond differently to economic shifts.
– Investment strategies are subject to differing opinions, and what works for an individual investor may not be applicable to all. Shen’s perspective does not necessarily align with all analysts or investors.
– Economic optimism can be clouded by unforeseen global events or trends that may cause market volatility.
Advantages:
– A positive macroeconomic outlook can lead to increased investor confidence and capital inflows into equity markets.
– Innovations in tech and other sectors can create new investment opportunities and drive market growth.
– A balanced investment strategy may mitigate risk while providing opportunities for return.
Disadvantages:
– Positive economic indicators are not guarantees of market performance, and unexpected downturns can occur.
– Overconcentration in trending sectors could expose investors to higher risk if those sectors experience a downturn.
– High dividend and ROE assets are typically in higher demand, which may make them more expensive and potentially lower their future returns.
Related Links:
– For insights into global economic trends and news, you can visit Bloomberg at Bloomberg.
– To keep up with tech industry developments, a resource like TechCrunch could be useful, accessible through TechCrunch.
– For more generalized financial news and updates, CNBC could be a helpful source, found at CNBC.
The source of the article is from the blog enp.gr