Is a phased style rotation coming?

Yesterday, US stocks saw a significant pullback in the semiconductor and tech sectors due to Broadcom's earnings falling short of market expectations, which caused a sharp drop in its stock price. However, at the same time, for instance, we see the Dow Jones Industrial Average surged, rising nearly 2% at one point, with the Dow primarily consisting of industrial and financial sectors, along with some healthcare. The European markets also rose overall yesterday, and the European stock market as a whole can be seen as a value-style sector close to the US Dow Jones.

In fact, over the past year, the performance of the Chinese and US stock markets has been very similar, both led by tech stocks driving the market up, while some traditional industries unrelated to tech, such as healthcare and finance, have barely risen. Of course, recently, with the approaching of mega IPOs in June (Space X and Changxin Technology), the World Cup, and the Federal Reserve's interest rate meeting, risk appetite may tighten in the short term. At this time, some previously lagging value sectors may have rotation opportunities.

Domestically, sectors like coal have performed relatively well recently, serving as a good hedge against tech pullbacks. On the US stock side, sectors like finance and healthcare are also a good hedge against US tech risks. However, overall, this year should still be dominated by a tech growth style, with these sectors mainly serving as temporary hedging allocations.

Therefore, in the Biaojiu Global Investment Advisory Portfolio managed by Guolian Minsheng that I follow, after the latest portfolio adjustment, not only has the QDIII content been increased, but it also continues to adhere to a diversified global multi-region, multi-asset allocation, with allocations still in US healthcare and European markets. So even if US stocks pull back recently, the overall pullback of the Biaojiu Global portfolio is expected to be relatively more controllable.

(Not for investment purposes)

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