Private equity fund Beijing's observation of the $100 billion market has been "exposed": The difficulty of fundamental investment is increasing, and in the future, stocks will be purchased around "A500".

On November 12th, the internal views of the private equity fund Beijing Investment managed by the billion-dollar private placement were revealed by sources. The head private equity fund, led by former public offering annual champion Zhuang Tao, expressed to its high-net-worth clients that in the future, they will trade from the perspective of "policy variables," focusing on industry leading companies in the A500 index and Hong Kong-listed NETDRAGON companies. This is the first private placement in the private equity circle to explicitly state that it will focus on investing in A500 weight stocks. Zhuang Tao, who excelled in stock selection in the past, also admitted: in a valuation system that is in turmoil, investment logic based on the fundamentals of listed companies is becoming more difficult. Warning of "speculative trading" risks Regarding the recent uptrend in the market, Beijing Investment summarized to its clients: the impact of the previous bear market, the rapid expansion of the passive ETF market, and the accelerated dissemination of information on self-media platforms together contributed to the initial stage of the bull market, but institutional holdings did not perform as expected. However, this billion-dollar private equity fund warned that in the current market trend, speculative trading dominates, and while market sentiment is high, there is a lack of solid investment logic and fundamental support. Increased difficulty in fundamental investments Beijing Investment revealed to its clients: starting from value growth investment supported by performance, we have layouts in the A-share, Hong Kong, and US stock markets. In the A-share market, in a valuation system that is in turmoil, investment logic based on the fundamentals of listed companies is becoming more difficult. Although liquidity is abundant and market sentiment is high, the prevalence of thematic concept stocks makes institutional participants daunting. Regarding the Hong Kong stock market, this private equity fund believes that valuations are at a low point, with the internet, consumer, and technology sectors holding significant weight. Structural trends make hedging difficult, and while the strong performance of the semiconductor sector can support the index, on the other hand, the decline of the Hang Seng Tech Index poses a challenge. Limited downside potential in the market Zhuang Tao further pointed out: the US dollar index approaching its high for the year has once again brought pressure on the renminbi, and A-shares may return to a volatile pattern in the short term due to overseas liquidity risks following rapid gains. Market sentiment is under pressure, and risk appetite is decreasing. However, domestic policy bottoms and financial bottoms have repeatedly appeared, indicating limited overall downside potential. In view of this, Beijing Investment will maintain flexible diversified investments in both domestic and overseas markets, and adjust positions in a timely manner. Investing around the "A500 index" During index fluctuations, Beijing Investment will actively reserve investment varieties for the next stage and increase holdings at the right time. Future investment strategies will focus on two angles: Firstly, from the perspective of policy variablesgrowth stabilization policies may continue to exert force, leading companies in the A500 index and Hong Kong-listed NETDRAGON companies are expected to benefit. As ETFs are currently the main source of incremental funds, they reinforce this strategy in terms of funding. Secondly, from the perspective of industrial trendsfocus on AI-related software and hardware, intelligent driving, and sectors with large industrial spaces such as Siasun Robot&Automation, and focus on national security themes such as defense, information technology, and autonomous controllable areas such as semiconductors. This article was reprinted from "Wall Street News, written by Sun Jiannan; GMTEight editor: Jiang Yuanhua.