Are actively managed funds performing well again? Outperforming passive indexes once more, what is different this time?

The speculation on the reshaping of the artificial intelligence industry landscape sparked by this DeepSeek event has triggered a reassessment discussion on the value of Chinese technology stocks by global capital. Benefiting from this, the AI sectors of the Hong Kong and A-share markets surged, with the Hang Seng Tech Index entering a technical bull market. While enjoying a high degree of prosperity, as of February 10th, several funds have reached record high annual returns, with two notable characteristics: First, the highest annual return rate of funds has reached 47%. The Penghua Carbon Neutrality Theme Fund, managed by Yan Siqian, recorded an annual return rate of 47%, followed closely by the Yongyuan Advanced Manufacturing Selection Fund managed by Zhang Lu, with an annual return rate of 45.4%. In addition, 35 funds under China Aviation, Qianhai Kaiyuan, Ping An, and Fuguo have annual return rates exceeding 20%. Second, active funds have once again significantly outperformed passive investments in terms of annual returns. As of February 10th, active products have claimed 45 out of the top 50 spots in terms of annual return rates, with the best-performing ETF being the Bosera Innovation Board AI ETF, boasting an annual return rate of 24.44% and ranking 16th in the market. Following the hype surrounding star fund managers, ETFs have quickly risen to prominence, gradually replacing active management and becoming a convenient tool for investors to enter the market. By the end of the third quarter of 2024, passive management surpassed active management for the first time in terms of total assets under management. Fund companies have been actively expanding into ETFs and other passive index products, indicating that those who embrace ETFs will dominate the market, making ETFs a crucial part of fund companies' business layouts. Returning to the topic of returns, the comparison between active and passive management once again comes into focus. While the debate on which is superior may never yield a definitive answer, what unique qualities do leading funds possess, and have active funds undergone any new changes that are worth exploring? Active funds take the lead with 45 out of the top 50 spots in terms of returns Active management funds are once again leading the way in terms of returns. As of February 10th, there are already 34 funds in the market with annual returns exceeding 20%, with only one passive ETF, the Bosera Innovation Board AI ETF. Among the top 50 in terms of returns, passive funds only occupy 5 spots. Specifically, the top-performing fund is the Penghua Carbon Neutrality Theme Fund with a return rate of 47.08%. Yan Siqian, previously known as the "Electric Vehicle Goddess," has now become the "AI Pioneer," leading the industry. In second place is the Yongyuan Advanced Manufacturing Selection Fund managed by Zhang Lu, with an annual return rate of 45.39%, followed by Wang Sen's China Aviation Trend Leading Fund with an annual return rate of 37.89%. When the short-term return rate reaches 20%, the market may question whether the fund managers are gamblers. But when the gains exceed 40%, the perception shifts to the manager's investment abilities. As fund returns soar, the market once again focuses on Yan Siqian, and Penghua Fund has also actively organized an online roadshow titled "Penghua Fund Yan Siqian - Artificial Intelligence Special Event." Starting from February 10th, the roadshow will be held every afternoon for a period of 10 days. According to the conference introduction, Yan Siqian and her research team will discuss AI technology evolution, emerging trends in industrial applications, investment themes such as computing power infrastructure, large models, Siasun Robot&Automation, and core targets in the global AI industry chain for ten consecutive days, analyzing investment opportunities in the intelligent era. Another fund with a return rate exceeding 40% comes from Yongyuan. Based on publicly available information, Yongyuan's strategy leans towards platformization and toolization. Centered around new productive forces, Yongyuan Fund has clearly positioned its active "Selection" series of products. For example, the Yongyuan Advanced Manufacturing Selection fund focuses on Siasun Robot&Automation, the Yongyuan Digital Economy Selection fund focuses on AI applications, the Yongyuan Low Carbon Environmental Protection Selection fund focuses on low-altitude economy, the Yongyuan Semiconductor Industry Selection fund focuses on chip lithography machines, and the Yongyuan High-end Equipment Selection fund focuses on satellite internet. Industry insiders reveal that some investment advisory portfolios have already incorporated selected products as a key part of their strategy to embrace new productive forces. Why are active management funds able to outperform? In the industry's view, the reasons behind active outperforming passive are not difficult to analyze. Firstly, the fund's management scale is not large, making it more flexible in terms of portfolio adjustments. In contrast to the previous star fund managers who managed multi-billion-dollar funds, of the top 50 in terms of annual returns, only Zhai Xiangdong's CMB Advantage Enterprise Management Fund has a scale exceeding billions, followed by Huang Xingliang's Wan Jia Industry Advantage fund, which had a scale of around 7 billion yuan in the fourth quarter of last year. In addition, Huang Xingliang's Wan Jia Autonomous Innovation fund had a scale of 2.15 billion yuan, making it the third largest. With a management scale exceeding 1 billion yuan, there are also five funds managed by Yan Siqian's Penghua Carbon Neutrality Theme, Zhang Lu's Yongyuan Cash Manufacturing Selection, Xu Zhixiang's Fuguo New Materials and New Energy, Dong Jizhou's Taixing Small Cap Selection, with other products mostly in the range of hundreds of billions in scale. Secondly, their investment themes are clear, focusing on the AI industry chain catalyzed by DeepSeek. The nation's strategy team led by Lin Rongxiong believes in the four-stage theory of technology investment pricing: giants-infrastructure-key links in the industry chain-supply-demand gap. This is the wave of AI: phase 1, buying the popular giants (chatgpt); phase 2, giants start capital expenditures to buy infrastructure (computing power); phase 3, the formation of the industry chain focusing on key links (semiconductors); phase 4, phases 1-100 focusing on process gaps (consumer electronics and ecosystem software). Thirdly, an extremely important point is that in the 0-1 stage of the industry, active stock selection has an advantage. While the industry has not yet formed economies of scale, active fund managers can discover high-quality stocks through research, making a more significant contribution to the net asset value of their portfolios. As Zhang Yinxian of Ping An Fund mentioned, active fund managers adhere to an industry-based approach to seeking investment opportunities, looking for companies with a high probability of entering the supply chain in the Siasun Robot&Automation business on one hand and actively exploring and positioning excellent companies with improved business fundamentals and new expansions in the Siasun Robot&Automation business on the other. These companies are likely to stand out in new areas of new materials, new processes, and new design solutions, enabling their existing products to find new application scenarios in the field of Siasun Robot&Automation and achieve new breakthroughs in the 0-1 stage. Ultimately, the unique characteristics and strategies of active funds continue to drive their outperformance in the market, making them a preferred choice for investors seeking higher returns.Breakthrough and thus seize the opportunity for valuation and performance double growth.There is no distinction between active and passive. Currently, passive investing is popular, with ETFs thriving, while active management continues to shrink, especially due to the damage caused by aggressive marketing of active products in the past, the trust crisis in active management funds has not been resolved. With the change in the market, after a large number of active management performances have surpassed passive ones, the market is once again considering who to choose. Zheshang Fund has pointed out before that passive investment strategies invest in market index portfolios to earn market average beta returns, while active strategies actively seek out quality companies in the market in order to earn excess returns alpha. This naturally determines that the two types of products are suitable for different styles and market conditions, in the following three scenarios, active managers are likely to underperform passive ones. First, as the market becomes more efficient, it becomes increasingly difficult to obtain excess returns through technical analysis, fundamental analysis, etc. As information transmission efficiency and transparency increase, market pricing becomes more efficient, making it naturally more difficult to earn excess returns. Second, when the market is rapidly rotating and lacks a sustained main theme, it becomes increasingly difficult to obtain sustainable excess returns through timing, industry deviations, and style deviations, while the long-term viability of rule-based investment models continues to improve. Third, as the index evolves with the times, industry distributions become more balanced and more growth-oriented and dynamic. Therefore, compared to the past, such indexes themselves have good beta, making it more challenging to outperform them. In reality, the debate over who is better is unlikely to yield results. In the complex and ever-changing market, both active and passive have their unique advantages. For investors with stronger investment abilities, using tools like passive products to track market trends may be more suitable, while for investors with less investment ability, active funds or investment advisory portfolios may be a better choice. This article was originally from "Cailian News" and is edited by GMTEight: Liu Xuan.