"Do you have it?" A sentence from popular idol Wu Yifan recently became popular on a talent show, becoming a trendy greeting for the younger generation when they meet, and his body also penetrated into all aspects of public life with lightning speed. This week, the second quarter report of mainland public funds began to make a brilliant debut. When the report card of fund managers was exposed in the second quarter, investors found that it was already popular among public funds: there are the "Belt and Road" fund style drifting and playing with blue chips, the investment of Shanghai, Hong Kong and Shenzhen funds revolve around Hong Kong, and the transformation of fixed-increase funds to invest in new stocks, and of course there are mixed funds that are swaying to carry on military industry... This is an era of freedom, and the younger generation of fund managers seem to be more willing to show their personality in a wild way!

And is this casualness progress or regression for public offerings? In an era when investment only focuses on results but not processes, let us seriously pick on the process!

In recent years, the style of the theme public funds in mainland China has become a trend, and the first one is the "Belt and Road" fund.

In fact, from the fundamentals alone, the "Belt and Road" sector has many happy events: the "Belt and Road" summit forum was successfully held in Beijing. At the same time, in the first half of the year, large orders for the "Belt and Road" signed by foreign companies and China came one after another. Judging from the interim report, the performance of listed companies related to the "Belt and Road" has achieved growth. Among the more than 40 "Belt and Road" concept stocks that announced their performance forecasts, only 5 have expected net profits to decrease year-on-year.

However, the performance of the "Belt and Road" theme funds was unsatisfactory: Among the 19 "Belt and Road" theme funds, 9 of them suffered net value losses in the second quarter. What is even more interesting is that funds such as Guotou UBS New Silk Road have experienced style drift, but the net value growth rate is still negative.

What kind of meat should I sell when I have a sheep's head?

Statistics show that among the 19 "Belt and Road" theme funds, Penghua New Silk Road ranks at the bottom with a return of -10.35%. In addition, Qianhai Kaiyuan Belt and Road Initiative, Zhongrong Belt and Road Initiative, and Boshi Silk Road Theme's second quarter performance losses also exceeded 5%. If you look at the "Belt and Road" theme funds in detail why nearly half of their performances are incurred? A reporter from "Red Weekly" read the quarterly report and found that many funds did not allocate the "Belt and Road" concept stocks, but had style drifted, but the heavily held stocks selected after the drift showed a significant decline.

Taking Guotou UBS New Silk Road as an example, the net value growth rate of the fund in the second quarter was -3.68%, and the performance benchmark for the same period was 3.28%. The quarterly report shows that in the second quarter, Zoomlion is a concept stock of the fund's heavy holdings, and the remaining nine are: Xinhua Insurance, Poly Real Estate, Guangyuyuan, Xiamen International, Shanghai Mechanical and Electrical, Oriental Electric, Green Network Technology, Qidi Guhan and St. Zixue, all of which have nothing to do with the concept of the "Belt and Road". In the fund's prospectus, it is mentioned: "Invest in the Belt and Road Theme related to the theme of the fund's definition is not less than 80% of the fund's non-cash assets." This is a suspicion of selling dog meat with a sheep's head.

This is not the first time that Guotou UBS's new Silk Road has experienced style drift. Since the third quarter report last year, the fund has re-allocated stocks such as Yunnan Baiyao, Wuliangye, and Gree Real Estate. In the first quarter of this year, none of the fund's heavily held stocks were just concept stocks in the "Belt and Road" sector.

After the style drift, the heavily held stocks in the second quarter suffered large losses. Green Network Technology, Qidi Guhan and st Zixue fell by more than 20% in the second quarter, 20.9%, 21.1% and 22.4% respectively. In addition, the stock prices of Zoomlion Heavy Science and Technology, Oriental Electric and Shanghai Mechanical and Electrical also fell to varying degrees in the second quarter. From the quarterly report, we can see that Qidi Guhan, Green Network Technology and Shanghai Mechanical and Electrical Engineering were the fund's heavy holdings in the first quarter, and the rest were newly added stocks in the second quarter, but the decline in stock prices dragged down the fund's performance.

Fund managers Wang Peng and Di Xiaojiao said in their second quarter report that they still maintained their judgment at the end of last year and believed that there is no major rise in the market at present. Therefore, the allocation of heavily held stocks is also biased towards large-cap blue chips. Except for Green Network Technology, Qiding Guhan and st-Zixue, the rest are large-cap stocks with a market value of over 10 billion.

A fund analyst from a securities firm in Shanghai told reporters that the fund company's products are inconsistent with the investment scope specified in the contract, which is a breach of contract. Some fund companies lack strict internal management and do not track and manage the investment targets after the product is issued.

So, why do the "Belt and Road" funds frequently experience style drift? A fund analyst from a securities firm in Shanghai told the Red Weekly reporter that the performance of large-cap blue chips in the first half of this year is remarkable, so many "Belt and Road" theme funds' investment styles drifted to large-cap blue chips. In addition, the concept of "Belt and Road" includes a large number of individual stocks in road and bridge, infrastructure, transportation and other industries. These sectors fell seriously in the second quarter, which also made the "Belt and Road" theme funds avoid stock selection.

"Belt and Road" concept stocks may turn around?

Summarize the reasons for the losses of the "Belt and Road" fund in the first half of the year: In addition to the style drift and the decline of heavily held stocks, the overall increase of the "Belt and Road" sector is also relatively poor. In the second quarter of this year, the "Belt and Road" sector rose by -8.29%, while the Shanghai Composite Index rose by -1.07% during the same period.

"Red Weekly" reporters have counted that among the 87 "Belt and Road" concept stocks, 66 stock prices fell in the second quarter, with st Qingsong falling by 54.2%, ranking first in the decline list. In addition, 15 individual stocks fell by more than 20%, including constituent stocks in the CSI "Belt and Road" index such as China Steel International and China Chemical.

Although the money-making effect of the "Belt and Road" sector was not prominent in the second quarter, many institutions are still optimistic about the opportunities in this sector in the second half of the year. For example, Zuo Jinbao and Deng Hu, fund managers of Changxin Belt and Road Initiative, believe: "Although the style of the CSI Belt and Road Initiative is biased towards the market, the entire index showed a lot of declines in the second quarter with a large increase in the first quarter. Compared with historical valuations, the Belt and Road Initiative index constituent stocks that have fallen sharply are currently in a relatively reasonable position in the historical center, and some stocks with good fundamentals have outstanding allocation value."

Interestingly, the "Belt and Road" fund may not allocate "Belt and Road" stocks, but non-Belt and Road funds have people who are keen on the "Belt and Road" sector, such as the Baoying Pan-Ocean Growth Fund. In the second quarter, Baoying Ocean Fund held a heavy holding in China Industrial International and TBE Electric; Beixin Ruifeng Ping An China Fund held a heavy holding in four "Belt and Road" concept stocks in the second quarter, including China Steel International, Gezhouba, Inner Mongolia Yiji and Northern International.

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