According to the growth performance of the Shenwan first-level industry index since 2005, food and beverage firmly occupy the first place, and it is the long bull champion of A shares.
At the moment, market funds are optimistic about the spring market of food and beverages. Will it be a good time for layout? Xu Meng's answer is yes. He believes that the best time to invest is 15 years ago, followed by now.
There are two points of logic. First, there is a short-term catalyst. New Year's Day and Spring Festival are coming soon, and unexpected sales or product price increases are good for the entire sector. A strong economic recovery next year is expected to drive rapid consumption growth and the fundamentals of the food and beverage industry will recover. Superimposed on the low performance base of each company in the first quarter of this year, the performance of the first quarter next year will show a high growth rate year-on-year.
The second is long-term investment value. With the economic recovery, people's income levels have risen, and people's consumption expenditures have increased in the context of consumption upgrades. With the transformation of the mode of driving economic growth, the role of consumption in driving the economy will become more obvious.
Buffett’s teacher Graham said that the market is a voting machine in the short term and a weighing machine in the long term. The long-term bullishness of food and beverages is not a bubble, but corresponds to long-term performance growth.
According to the research report of China Securities, the CSI subdivision food and beverage industry has maintained a ROE of more than 15% since 2014, and more than 20% after 2018. As the strongest baijiu in the A-share market, there are three liquors that have risen more than 10 times since 2015, namely Kweichow Moutai, Wuliangye and Shanxi Fenjiu.
It should be noted that food and beverages have been out of the Changniu in the past ten years. Can they continue in 2021? Xu Meng believes that the food and beverage industry is still in a stage of rapid development and the market space is large. The market share of leading companies continues to increase. Leading companies representing wine, dairy products, and condiments still have relatively good investment opportunities.
Xu Meng's judgment is well-founded. Consumption has become a new driving force for economic growth, and my country is experiencing the era of "big consumption era". Judging from the historical experience of the economies and stock markets of various countries in the world, major developed countries have all experienced a "big consumption era". U.S. stocks have experienced long-term consumption for 30 years from the 1960s to the 1990s.
Currently in the era of inflation + low interest rates, investors are chasing profitable and stable growth products, and at the same time, the tolerance for valuation is increasing. The food and beverage industry has a long track and strong profitability, and institutions will give a definite premium. Whether in the past or present, short-term or long-term, food and beverage have the logic and background to continue to dominate in various industries.
Group with leading fund companies to seize food and beverage opportunities
Although the food industry has a good track, the Matthew effect is prominent, and investment opportunities are concentrated in leading companies. After a long period of rising, the stock prices and valuations of leading companies have been very high. For example, Moutai will cost 180,000 yuan per lot, and Wuliangye will also cost 20,000 yuan. Investors are afraid of high prices. Once the stock price adjusts, there will be great pressure on funds.
Regarding this phenomenon, Xu Meng’s view is that basic orientation is the first logic of allocation. The strong profitability of food and beverages has led to the fact that the valuation of this sector has not been cheap. Historically, the risk of not investing is greater. . In addition, high valuations can be digested by performance growth, not necessarily waiting for stock price adjustments.
In the face of stock selection difficulties and high funding thresholds, ETF funds are the preferred method of participation for many investors. On December 14, the China Food and Beverage ETF was officially launched (subscription code: 515173, transaction code: 515170). The sale period is from December 14 to December 23. The online cash subscription period is from 21 to 23. Investors can Subscribe through major brokerage platforms.
As mentioned above, the underlying index tracked by the China Food and Beverage ETF is the subdivided food and beverage industry of China SecuritiesIndustry theme index. In the industry distribution, liquor accounts for 58% of the weight, dairy products and condiments also exceed 10%. The constituent stocks are all leading companies, such as Guizhou Moutai, Wuliangye, Haitian Weiye, and Yili. Said to be the best among the best.
In Xu Meng's view, food and beverage ETFs are one of the varieties that can be used as a pension configuration and are suitable for long-term holding. This is inseparable from the characteristics and advantages of food and beverage ETFs.
The first is profitability. The leading food and beverage sectors have strong profitability, and the long-term performance growth is highly certain.
Secondly, the ETF operating mechanism has a comparative advantage. Compared with active funds, the upper limit of the equity weight of food and beverage ETFs is 15%, further overweighting leading companies. The plate concentration is high, and the style does not drift. As purchases and redemptions are physical stocks, large purchases and redemptions have little impact on the fund's performance. The position is basically 100%, and the capital utilization efficiency is high.
Finally, the underlying index has a comparative advantage. Historically, the annualized return rate of the subdivided food and beverage index is better than other indexes in the food and beverage sector.
The advantages of the above three food and beverage ETFs are summarized by Xu Meng as long-term growth, leading companies with premiums, and indexes with advantages. In Xu Meng's view, the China Food and Beverage ETF has another major advantage, which is the excellent fund management and operation capabilities of China Asset Management, that is, "ETF has China Asset Management."
It is understood that China Asset Management is currently the largest fund company managed by domestic equity ETFs, ranking first in the industry for 16 consecutive years. Of course, the spokesperson of a fund is the fund manager, and performance is positively correlated with the ability of the fund manager.
As the proposed fund manager of the China Food and Beverage ETF, Xu Meng is the director of the Quantitative Investment Department of China Asset Management. The outside world judges him that his performance is stable and his qualifications are deep. According to the data, Xu Meng has 7 years of public fund management experience, and the scale of public fund management reached 64.63 billion, and he won the 2018 Golden Bull Award and Golden Fund Award.
For the China Food and Beverage ETF, although the entry threshold is only 1,000 yuan, no investment is zero risk and immediate benefits are seen. Xu Meng suggested that investors should pay more attention to the profitability of the company, earn more income from performance growth, and less income from valuation. In terms of operating methods, investors can diversify risks by means of fixed investment.
There are more than ten days left in 2020. New Year's Day and the Spring Festival are approaching, and the food and beverage sector will usher in a wave of performance sprints. There is a view that the style of capital markets is shifting from liquidity-driven to profit-driven, and industry leaders with good performance are more likely to receive attention. Food and beverage ETFs are undoubtedly one of the good ways to capture the spring market.
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