In the first three quarters, the stock market was weak as a whole, and A shares were cost-effective assets in the fourth quarter.

During the National Day holiday, China Fund Newspaper invited the general managers, investment directors or well-known fund managers of several fund companies to analyze and summarize the stock market in the first three quarters and look forward to the investment opportunities of A shares in the fourth quarter for investors' reference only.

Xu Lirong, General Manager of Guohai Franklin Fund:

In the fourth quarter, the market is expected to usher in a mean return.

In the first three quarters of 2022, the A-share market dropped significantly after rising for about three years. In the first four months, various indexes, especially growth companies, showed a sharp correction; Since the end of April, driven by new energy growth companies, the market has started a relatively strong rebound, but it is still dominated by structural market; Since July, the market has fallen again under the influence of multiple factors at home and abroad, and investors are depressed.

From the later analysis, the macro factors such as the conflict between Russia and Ukraine and the change of epidemic situation have provided some explanations for the decline of the market, but we are more inclined to think that the main driving force for the market correction this year is the mean return after the valuation of growth companies has been greatly improved. Under such a market background, we continue to reverse the bottom-up stock selection idea, make full use of the opportunity of the sharp decline of growth stocks, open positions on dips for some growth companies with already high return-risk ratio, and conduct band operations for some companies with higher excess returns, so that the overall fund portfolio remains relatively balanced.

We have always believed that the China stock market has entered a new stage of market rise led by excellent companies a few years ago-that is, "bull stocks first, then bull market". We have observed in more and more industries that many outstanding listed companies, by virtue of their own strategic planning and senior management, constantly overcome the troubles of industry cycle and macro-fluctuations, and constantly improve shareholder returns and market share. In quite a few industries, the benign interaction between the stock market and the industry also provides these high-quality companies with sufficient capital market resources and good investment returns for investors.

Looking ahead, in the long run, although China's economic development still faces many challenges and pressures, the benign development of the real estate market, the deepening of reform and opening up and many other issues are still being solved, and geopolitics may also bring shocks, from the perspective of stock investors, we are still full of confidence in China's economy and stock market. The sustained and healthy growth of high-quality companies in China and the subsequent asset repricing will be the main driving force of the future market. In the future, with the increase in the proportion of institutional investors and the continuous inflow of long-term funds, the stock market as a whole will continue to maintain a long-term and stable upward trend, and fluctuations brought about by various macro and geopolitical factors will provide us with stock selection opportunities with higher return-risk ratio.

In the short term, the main problem facing the economy at present is that it will take some time for consumption to recover. With the introduction of relevant incentive policies, the progress of consumption recovery remains to be seen. However, policies, infrastructure and exports remain flexible, which will support the macro economy. The real estate policy is worth looking forward to, and the sales data of real estate in the future may gradually recover with the development of the policy. In terms of liquidity, although some funds reduced their holdings in China market at the beginning of the year due to geopolitical reasons, we think this is not sustainable and directional. According to our observation, more and more funds are interested in China market and want to invest in China market. The main reason is that they value China's own excess returns and its weak correlation with the global market. The inflow logic is continuous and directional. Even if the current spread between China and the United States is very large, we don't feel particularly pessimistic. Interest spread is an important factor affecting capital liquidity, but it is not the only factor. In the medium and long term, China's economic growth will play a more decisive role.

As a bottom-up stock picking investor, from some companies we are concerned about, the profit growth and prosperity of enterprises are still strong. Although there are not many optimistic factors in the market as a whole, historically, emotion is one of the observation indicators, and the capital market will react in advance and overreact. Recently, affected by market sentiment, many companies have made substantial adjustments. The market turnover dropped significantly from a month or two ago, and investors' pessimism was close to that in April. Looking forward to the fourth quarter, we believe that market sentiment may be at a low level, and the process of mean regression is expected in the future, but the extent, intensity and structure of regression may depend more on the profitability and valuation of different enterprises. It is expected that in the next few months, some companies with low valuation and large market value may perform strongly as a whole. In the past year or two, including new energy companies with strong performance this year, small and medium-sized companies may perform weakly.

We will continue to adhere to the investment strategy of bottom-up stock selection, continue to explore high-quality companies that meet our stock selection strategy in more industries, build a relatively balanced investment portfolio, gradually accumulate excess returns from stock selection, and strive to obtain reasonable risk-adjusted returns for investors.

Introduction to Xu Lirong:

Mr. Xu Lirong, 25 years experience in securities industry, 65,438+05 experience in Public Offering of Fund management, CFA, CPA (non-practicing), lawyer (non-practicing), Master of Economics, Central University of Finance and Economics. At present, he is the general manager and investment director of Guohai Franklin Fund Management Co., Ltd., managing five funds: Guo Fu China Income Mix, Guo Fu Potential Mix, Guo Fu Research Select Mix, Guo Fu Value Growth One-year Holding Period Mix and Guo Fu Quality Enterprise One-year Holding Period Mix.

Yuan, Head of Asset Allocation Department and Fund Manager of Xingyin Fund:

Looking forward to the fourth quarter, A shares are currently assets with high cost performance.

Howard Marx said in the book Circulation that we may never know where we are going, but we'd better know where we are. At present, the A-share market is at the bottom of the cycle, with high cost performance. According to the data on September 26th, 2022, we use the CSI 800 Index to measure the market, and use the PB valuation which ignores the short-term performance fluctuation to measure the asset price. At present, the market is below the cheapest 10% in recent ten years. We measure the internal structure of the market with the PB valuation of 30 CITIC tier-one industries, and 2 1 industry has been below 50% in the past decade. The fact that the market is at the bottom of the cycle is the most fundamental reason for our optimism. (The above data source: wind, time point: September 26, 2022)

There are some voices in the market, expressing concerns about the macro-economy, the international situation and energy prices. But we believe that these negative factors have been fully reflected in the market price. At the bottom of the cycle, there are always various concerns. From the DCF asset pricing model, these short-term data have little impact on asset value. These concerns are more about the risk preference of the market. When the market valuation level is compressed to a significant low point, negative emotions are fully reflected and positive emotions are in the process of brewing. (pricein: the stock price is reflected one after another; DCF: Free Cash Flow Discount Method)

Looking ahead, we are full of confidence in the A-share market, but at the same time we need to be prepared to deal with the short-term complex situation. In the past three quarters of 2022, we protected the stock position of our portfolio in the process of market bottoming. The market looked for the bottom for the first time at the end of April this year, and we added stock positions near the bottom for the first time. When the market began to pull back in August this year, there was a voice suggesting whether the position could be lowered to avoid a possible pullback. At that time, I thought that the valuation position of the market rebound was below 40%, which was still at a relatively low level, so I chose to adjust the structure instead of lightening the position. I judge the increase or decrease of positions according to the overall overvaluation or underestimation of assets. If it is within a reasonable range, I will tend to protect my equity position, because I firmly believe that equity assets have a good long-term rate of return, and a short correction is the fluctuation we need to bear. (source: wind)

From the perspective of the real economy, the A-share market is under some pressure, but we see more opportunities. At present, the real estate industry chain is facing certain pressure, which also brings some troubles to the whole macro-economy. We are observing that we hope that real estate will return to a healthy and balanced state that is compatible with the population and economic volume, and the entire industrial chain will find its own value anchor again. Excellent companies from all walks of life, whether consumer companies or technology companies, are working hard. The headwind period of the market has given them great opportunities for leap-forward development, which has enabled the company to iterate and upgrade to a new level. For investors in the secondary market, the market also gives us a good opportunity to participate in the new journey of great enterprises at a more cost-effective price.

In terms of specific industries, although the overall consumption data in the consumer sector is relatively weak, many consumer companies have shown resilience beyond expectations. Good companies are still firmly expanding product lines, upgrading channels, building their own brands, and practicing their internal strength from three dimensions: product strength, channel strength and brand strength. Once the market picks up, these companies will perform well. The field of science and technology has been hit by the prosperity and the international situation, but our technology companies are developing products in a down-to-earth manner, expanding customers and beginning to have strong competitiveness on a global scale. We believe that these companies will have a bright future. Although the manufacturing field is facing the dilemma of high cost and low product price, we see that leading enterprises are expanding against the trend, building new production capacity with lower cost and new products with higher technical content and value, and seizing a more favorable competitive position. When a new cycle comes, they will go to a new height.

Reason tells us that A shares are cost-effective assets at present, but the ups and downs of the market will still affect our mood. It's a good way for me to calm down and do research. When I carefully study the competitive advantages and development strategies of excellent companies, their optimistic spirit constantly inspires me and makes us firmly believe that tomorrow will be better!

Jiang Jialiang, Research Director and General Manager of Balance Strategy Department of Puyin AXA Fund:

In the first three quarters, the market as a whole was weak.

Prosperity and growth remain the long-term main lines.

Looking back at the overall market trend this year, the only big opportunity in the first half of the year was concentrated in May and June. In May and June, the market showed a V-shaped repair market, focusing on repairing the overall market decline caused by the epidemic in March and April. After the middle and late July, the market entered a volatile market. In August, the performance fluctuated sharply, and the Shanghai and Shenzhen 300 Index and the Growth Enterprise Market Index continued to decline. The current market is somewhat similar to that in March and April. In terms of external factors, inflation in the United States exceeded expectations, and the Federal Reserve raised interest rates more than expected. The domestic epidemic situation is repeated and the economic trend is downward, which leads to the overall weakness of the market, which is in the stage of intensified differences and accelerated rotation of styles, and the overall situation is in a state of yin decline.

In the first three quarters, the market lacked obvious money-making effect.

Jiang Jialiang believes that this year's A-share investment has two characteristics. The first is that macro events have a great impact on the market, and the second is that there has been great differentiation within the booming industry.

First of all, we have observed that the macro events in the market have had a great impact on the market this year, and the whole energy price brought about by the Russian-Ukrainian war is on the high side; Inflation in the United States continues to exceed expectations, and the Fed's interest rate hike expectations are constantly changing, resulting in a decline in market risk appetite; The epidemic situation repeatedly affects the macro-economy and consumption, and then constantly promotes the change of real estate policy.

Secondly, the huge differentiation within the market boom industry, the persistence and logical integrity of investment opportunities have some defects, and the difficulty of stock selection and investment has increased. For example, the same new energy sector, this year's hot spot lies in the inverter and energy storage in the photovoltaic field, but the performance of photovoltaic modules, new energy automobile industry chain and other sub-sectors is very general.

From the perspective of growth, the overall market is weak this year, and it is difficult to continue to earn excess returns. Due to the economic recession, the overall market prosperity is very weak, and domestic demand and production recovery are weak.

Growth and prosperity remain the long-term main lines.

Looking forward to the follow-up trend, Jiang Jialiang believes that in the short term, the market at the end of the third quarter is similar to the overall environment in March and April this year. Due to repeated epidemics, the Federal Reserve's interest rate hike, weak steady growth and the Russian-Ukrainian war, the market sentiment is more cautious. Therefore, the sectors that have performed well in the near future are value stocks such as real estate and coal of central enterprises with low valuation and (partially) improved fundamentals.

At present, the market has not shown a clear investment main line.

In the future, we will still focus on the investment sector with high prosperity. China is still a country with high growth rate among big countries, and the A-share market is still a growing capital market in the long run. Although there will be various disturbances in the short term, in the long run, prosperity and growth are still the biggest main line in the A-share market.

Secondly, it is to insist on balanced investment. On the one hand, it is internal growth, focusing on balancing trajectory and direction. In addition, when the market remains volatile, we will maintain a trading balance between growth and value.

At present, the overall performance of equity funds in 2022 is average, and the market lacks obvious profit-making effect. At present, the market focuses on new and old energy investment opportunities brought about by the high energy prices caused by the Russian-Ukrainian war; Opportunities brought by automatic control to semiconductor and military industries; Investment opportunities in real estate and real estate industry chain brought by economic expectations; As well as the tourism industry chain and consumer sectors such as liquor and medicine.

But looking forward to the whole year of 2022, Jiang Jialiang still maintains confidence. A balanced investment strategy is helpful for the fund to control the exit of the portfolio in a volatile city. On the main line, due to the change of energy pattern, we pay attention to the long-term upward trend of photovoltaic and other sectors, and at the same time pay attention to the opportunities of consumption and tourism industry chain brought about by economic stabilization and recovery.

Wang Hui, Deputy General Manager of Debon Fund:

Grasp the trend of the times and be optimistic about the opportunities at the bottom of the stage

Since 2022, domestic macroeconomic fluctuations have increased, funds have continued to be loose, and the stock market industry has accelerated its differentiation. From the steady growth expectation of economic rebound to the worry about inflation, to the escalation of the conflict between Russia and Ukraine, the closure of the epidemic and the switch of economic recovery, and the Fed's interest rate hike repeatedly exceeded expectations, a series of events dominated the staged market of the stock market, and the relatively complex market environment brought no small test to investment.

In order to benefit from this year's market style, the sensitivity of fund managers to changes in market sentiment is particularly critical. Only by clearly predicting the stage rhythm, and then stepping on the industry rotation from top to bottom, can he have a chance to capture significant excess returns.

Recently, the Shanghai Composite Index has been adjusted back to around 3 100, and A-share trading has a strong global recession. As inflation in the United States exceeded expectations, the dollar index strengthened and the commodity index became tough. The Federal Reserve unexpectedly raised interest rates by 75BP again in September, and maintained its hawkish stance after three consecutive sharp interest rate hikes. This has aroused strong concern in the market for a period of time, but in my opinion, so far, the market has priced the negative expectations adequately.

When the market fully prices overseas risks, the main contradiction of A shares will pay more attention to the expectations of domestic economy and policies. At present, there are more and more positive factors for marginal improvement. At least you don't have to be overly pessimistic during the year, but you should grasp this window period of active participation in the market.

/kloc-in the first half of 0/0, the macro-policy is in the window period that cannot be falsified, and the logic of economic recovery is the main thread of my optimistic thinking. Facing 2023, all the main factors driving the domestic economy may face more or less pressure. Under the background of historical high base and weak overseas demand, the pressure on exports will increase. The incremental contribution of fixed assets investment with sustained high growth rate is relatively limited, while the probability of fully activating real estate to stimulate the economy is relatively small. Therefore, I think the following two main lines are the investment clues of macroeconomic mapping in the A-share market:

First, after consumption continues to weaken, it may gain structural opportunities by benefiting from the dynamic adjustment of epidemic prevention policies;

Second, under the uncertain external environment, based on the dual-cycle strategy, there may be investment opportunities in related fields such as energy, security and manufacturing power.

Repeatedly affected by the epidemic, domestic consumption recovery is still weaker than market expectations. Although domestic consumption is expected to slow down in the medium and long term, the continuous optimization of epidemic prevention policies and the recovery and reshaping of consumption scenes will continue to bring marginal changes, which will lead to the reversal of the dilemma and the advance of investment opportunities, mainly concentrated in aviation, tourism, hotels, airports and other industries in the travel chain. The optimization of epidemic prevention policy will bring about a contrarian rise in the prosperity of consumer-related industries. Because the anti-risk ability of small and medium-sized enterprises is far weaker than that of large enterprises, under the repeated impact of the epidemic, the industry is facing a strong active clearance, and the supply-side pattern of the tourism chain will continue to improve. It is expected that with the recovery of various industries, the market share of leading companies will increase significantly, the chain rate of hotels will continue to increase, and the market share of head airlines will increase significantly. In the process of accelerating concentration, the performance elasticity and stock price space of tourism chain will be realized.

In the complicated and ever-changing international situation, frequent emergencies have become the new normal. Under this trend, I judge that the domestic economy will pay more attention to the development of internal circulation and pay attention to independence, security and autonomy. First, the independence of monetary and fiscal policies. European and American central banks turned to austerity after monetary easing, facing strong recession expectations. After 2020, China, guided by restrained policies, has formed effective confrontation and dislocation, giving us a window of independent development. To cope with the international situation, the most important things are energy security, military security and independent controllable manufacturing.

Energy security includes the synchronous development of old and new energy, which requires not only the domestic advancement of new energy equipment, but also the stability and controllability of traditional energy supply. After the realization of carbon neutrality, the investment in the construction of new energy system is increasing, which squeezes the capital expenditure of traditional energy, leads to the shortage of traditional energy supply and the upward price center, and then stimulates the further acceleration of new energy substitution. Therefore, while attaching importance to the rapid development of new energy, we cannot ignore the investment opportunities of traditional energy.

The direction of military security includes not only the vigorous development of national defense and military industry brought about by geopolitical conflicts, but also the accelerated integration of national defense and civilian technologies such as Beidou navigation and general aviation. The "14th Five-Year Plan" policy pays attention to national defense forces, which undoubtedly provides strong policy support for the development of the military industry in the medium and long term. In order to cope with the potential escalation of the military game, China's military industry will also seek sustained breakthroughs in several major industrial chains, such as satellite navigation technology, naval vessels and military aircraft. The input and output of the military industry will reach an unprecedented height, and the prosperity of the industry is expected to maintain a high level in a long period of time.

As far as the strategy of building a strong country is concerned, due to frequent foreign policies in the fields of chips, new energy, CXO and frequent changes in the trade environment, many key areas in which domestic manufacturing industries must achieve self-control have once again received great attention, mainly concentrated in the upstream of high-end manufacturing industries such as computers, electronics, military industry and machinery.

Looking forward to the market outlook, the panic about the market correction has been gradually realized, and the bottom of the stage has been formed, so there is no need to be overly pessimistic about the future. In the process of marginal factors gradually leading, the key to our investment is to grasp the high prosperity and certain investment opportunities generated in the process of repairing economic dislocation at home and abroad. The recovery of consumption and the direction of safety and autonomy are expected to contribute excess returns to the market in the future.

Tang Ge, Director of Equity Investment and General Manager of Equity Investment Department of Ying Da Fund:

Seize the current underestimation opportunity and lay out the main line of deterministic logic

Since 2022, the A-share market has experienced a rapid decline-rebound-double dip at the beginning of the year, and its decline, especially the market sentiment, has basically reached the situation that the A-share market has fallen sharply in 20 18. This year, the factors affecting the market at home and abroad are relatively sudden, especially the conflict between Russia and Ukraine has a long-term impact on international relations, energy supply and inflationary pressure. In response to inflation, the Federal Reserve and some major economies in the world raised interest rates and tightened liquidity, which in turn affected overseas economies and profit expectations. However, since March, the domestic epidemic has resumed and the demand recovery has been weak, which has led to a sharp decline in A shares under the influence of multiple factors.

The market is now entering a recovery period of confidence. For the expectation of the equity market, we should proceed from the certainty of investment, seize the current underestimation opportunity, and lay out the logical main line of certainty from the complicated uncertainty at home and abroad.

Since the outbreak of the new crown epidemic, the A-share market has shown strong independence compared with overseas equity markets. The difference at the policy level is that China's policy on epidemic prevention and control takes people's health as the basic decision-making bottom line, while overseas countries mainly focus on demand protection policies and launch historical-level stimulus policies. The difference in economic level is real. In terms of macro-expectation, China and the world economy will still maintain the staged dislocation driven by policies. At the same time, the deeper influencing factor is the reshaping of the industrial chain position of China enterprises in international competition. China's infrastructure, the technical ability of industrial workers and the stability of supply chain ensure the competitive advantage of key industries, which has been proved in the past decade, especially in the epidemic. Although there are signs of anti-globalization in the international economic environment, domestic enterprises have been suppressed for a long time because of trade conflicts, such as semiconductor embargo, tariff increase or the recent biopharmaceutical bill initiated by the United States against China enterprises. Although the momentum will not improve in the short term, from the overall perspective of economic and social development, the global division of labor pattern has been formed, and the structure of China's international trade is constantly being optimized. On the other hand, the huge domestic consumer market is also an important support. At the same time, a coin must have two sides, and external repression has also created more power and opportunities for the development of national enterprises themselves. We are convinced that in this round of global industrial transfer, China's competitive enterprises will have more certain growth performance.

In the short term, the bottom of the benchmark A-share cycle is prominent in history, and the resilience and profit expectation of benchmark A-shares are obviously attractive to the world in key overseas markets. There are three things to look forward to in the follow-up market: first, the impact of the epidemic on the domestic economy continues to weaken, including the difficulty in starting infrastructure construction and the promotion of consumption affected by the epidemic; Second, the state's support for real estate may be seen in the introduction of the combination boxing policy. The real estate enterprises will gradually get rid of the predicament, which will reduce its negative pull on the overall economic growth and play an important role in stabilizing the economy; Third, take the convening of important domestic conferences as an opportunity to show China's short-term and medium-term economic goals and expectations to the society, thus boosting market confidence. From the structural point of view, it is expected that the expected repair will be carried out from the following aspects: First, the upstream raw material prices remain stable or slightly lower, the constraints on the middle and lower reaches continue to weaken, and the uncertainty of the demand side is hedged; Second, some manufacturing exports are structurally optimistic under the energy crisis; Third, from the historical valuation, the market has entered a lower position, waiting for the expected repair and the gradual recovery of market confidence.

By industry:

1, midstream manufacturing industry

The logic of traditional manufacturing and advanced manufacturing is different. On the one hand, we continue to pay attention to enterprises whose energy costs tend to be stable, and midstream manufacturing enterprises driven by the natural recovery of production costs after the impact of the epidemic has weakened, including some traditional manufacturing enterprises, such as auto parts and wind power enterprises. On the other hand, pay attention to the competitive advantage enterprises with high technical barriers in the process of automobile intelligent development, and at the same time bring about performance growth through the increase of penetration rate; Enterprises that pay attention to new technologies and new products spawned by new applications, especially those that have stepped out of the second growth curve or are about to step out, including some scientific and technological enterprises in the electronics and computer industries.

2. Big consumption

In the past two years, there are actually many industries in the consumer sector at the bottom of historical valuation. On the whole, the Beta opportunity of the big consumer industry is not obvious, but after some enterprises have undergone passive supply-side reform, the dominant enterprises will either innovate their business models or seize the market against the trend, thus forming new profit points and waiting for the rapid rise of rapid performance.

3. Health care

Under the influence of the epidemic and the shadow of concentrated mining, the profits of the whole medical sector, including medical care, service and pharmaceutical industries, have no obvious chance to reverse in the short term. It is suggested to look for enterprises with different logic and pan-consumption attributes on the basis of in-depth investigation from bottom to top, and at the same time wait for the opportunity.

4. Financial cycle

We are optimistic about some insurance, especially the standardized operating enterprises that attach importance to product innovation, conform to industry rules and superimpose brand advantages. Concerned about the coal industry, it is believed that the rise of coal enterprises is due to the change of supply-side advantages superimposed on their own development, but the current rapid increase cycle of node profits seems to be basically coming to an end, and it is not recommended to chase after it.

Brief introduction of Tang Ge: He joined Ying Da Fund Management Co., Ltd. in May 2020, and is currently the director of equity investment and the general manager of equity investment department. He has served as project manager of corporate finance department and strategic cooperation department of large enterprises of Guotai Junan Securities Company, industry researcher of investment research headquarters of Guosen Securities Co., Ltd., senior researcher of investment research headquarters of Huaxi Securities Co., Ltd., assistant to general manager and director of equity investment department of Ying Da Taihe Life Insurance Co., Ltd., deputy general manager of investment management department, chief strategist and general manager of portfolio management department of Ying Da Insurance Asset Management Co., Ltd., assistant to president and general manager of securities investment department of Oceanwide Investment Group Co., Ltd. and assistant to president of Minfeng Capital Investment Management Co., Ltd.

Liu Kaiyun, Assistant President of Jiutai Fund, General Manager and Executive Investment Director of Zhiyuan Equity Investment Department:

Evaluate the situation and don't be pessimistic.

Inflation remains high and stock assets are under pressure.

In the first three quarters of 2022, under the influence of various unfavorable factors, the world's major stock markets were obviously depressed, and it was difficult for domestic stock markets to be immune. Generally speaking, three main factors have influenced the trend of the stock market this year. First, the sharp interest rate increase implemented by developed economies in the world in response to their own high inflation has obviously suppressed market risk appetite. The reasons for high inflation are complicated, including the disorder of global supply chain caused by objective epidemic, the energy and food security problems highlighted by geopolitical conflicts, and the instability of supply chain caused by anti-globalization led by ideology. Second, the domestic epidemic has repeatedly affected industries such as industrial production, transportation and consumer services, and affected the investment and consumption willingness of market participants. Third, transactions in some industries are overcrowded, and there is room for adjustment during the decline of market risk appetite.

Build a scientific system and improve the ability to deal with emergencies.

After experiencing the obvious market fluctuation this year, we have a deeper understanding of the complexity and versatility of the market. Facing the complicated and changeable market environment, as a fund manager, we should improve our sensitivity to changes in the investment environment, make adequate plans, make appropriate responses when the market does not develop in the expected direction, and reduce the portfolio risk. The change of market expectation determines the market trend, and the observation of expected marginal change should be detailed, which puts forward high requirements for the in-depth and forward-looking research. In the future, we should constantly improve the systematic tracking index system and build a more adaptive investment method.

Overcome linear thinking and not be blindly pessimistic.

We use the "four-dimensional driving model" (including four dimensions of policy, economy, capital and valuation) to analyze the market environment in the fourth quarter. First of all, from the policy point of view, in order to hedge the downward pressure on the economy, China has implemented loose monetary and fiscal policies, and introduced support policies for many industries, including new energy, consumption and real estate. Secondly, from the perspective of economic fundamentals, in the second quarter of this year, under the influence of the epidemic, the economic growth rate was low, and then the supply chain was repaired, and the impact of the epidemic on production and consumption was reduced, and the economy stabilized and rebounded. In addition, there is a certain time lag between the introduction of economic policies and their effectiveness, and the trend of economic stabilization and weak recovery is gradually taking shape. Thirdly, from the perspective of funds, since February, 20021,the issuance of funds has gradually cooled down, and the incremental funds in the market have gradually decreased. This year is the freezing point of fund issuance. With the stabilization of the future market, the fund issuance will be gradually repaired, and the incremental funds in the future market can be expected. Fourth, after the market adjustment in the first three quarters, the current market valuation has been in an obviously underestimated area, and the implied rate of return of stocks is high, which has begun to have obvious investment value. On the whole, we are not pessimistic about the equity market in the fourth quarter. We need to overcome linear thinking, look for potential positive changes, and grasp the good opportunity of layout investment in the market pessimism. From the industry point of view, we think that under the expectation of economic recovery and the decline of the impact of the epidemic on the economy, the consumption, medicine and service industries that have been fully adjusted in the early stage may have the opportunity to obtain excess returns. In addition, the new energy industry has a broad development space, industrial changes are surging, and the prosperity remains high. The recent phased adjustment has also given the market good investment opportunities.

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