The Hang Seng Tech Index has entered a technical bear market..
Haven't talked about Hong Kong stocks for a long time, let's chat about them. This year, Hong Kong stocks have continued to be very disappointing, especially the Hang Seng Tech Index. Actually, the overall performance of the Hang Seng Index has been okay, as there are still many value and dividend sectors that are relatively resilient. However, the performance of the Hang Seng Tech and Hang Seng Biotech indices this year has been very poor.
The overall weak performance of Hong Kong stocks this year is mainly due to the large number of IPOs issued in previous years, with many companies of varying quality going public in Hong Kong. The lock-up period is gradually beginning this year.
In fact, from past IPO data, we can see that the impact of IPO fund-raising on the market is relatively controllable. However, once the lock-up period ends, the pressure on the market from the wave of share unlocks is more significant.
Furthermore, for example, in the latest research on the Hang Seng Tech Index, there is suspicion of buying at high levels. After being included in the Stock Connect (for Hong Kong) and the Hang Seng Tech Index, Zhipu and MiniMax began to decline sharply. I mentioned in a previous article "First Batch of Funds Heavily Invested in MINIMAX and Zhipu" that I reviewed some funds that invested in MiniMAX and Zhipu, but these are QDII funds, meaning they bought before being included in the Stock Connect. Therefore, if they took profits at high levels recently, they actually fully enjoyed the first round of the dividend period from the listing surge of MiniMax and Zhipu.
But index funds are different. They must strictly follow the rules after being included in the Stock Connect and the index benchmark, passively buying regardless of individual stock performance. This is the annoying aspect of index funds.
Therefore, the funds with better overall performance this year are still actively managed funds. This is also why I started increasing my follow-up investment in the Biaojiang Active Alpha fund advisory managed by Guolian Minsheng this year, because overall this year, actively managed funds have the advantage of stock selection alpha and the benefit of fund clustering. Look, recently, whether it's Hong Kong stocks or A-shares, the indices have already returned to the previous low point in April. However, although Biaojiang Active Alpha has recently adjusted along with the market, it is still higher than the April low point.
(Not as investment advice)
$China Southern Hang Seng ETF(513600.SH) $HSTECH ETF(03032.HK) $KNOWLEDGE ATLAS(02513.HK) $MINIMAX-W(00100.HK)
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