In the wave of index funds that have continued to expand this year, Smart beta index funds with their "smart" attributes have emerged. This type of fund not only retains the advantages of traditional finger base establishment transparency, stable style, and low cost, but also incorporates one or more "enhancement factors" to bring about enhanced benefits and reduced risk, and has both passive investment and active The dual advantages of investment have attracted widespread market attention and investor recognition.
The Tianhong CSI Dividend Low-Volatility 100 Index-based launch fund (Class A: 008114; Class C: 008115) is just such a "smart" Smart beta fund. Due to the introduction of a two-factor strategy of dividends and low volatility, the fund has the four good investment advantages of “good standard, good strategy, good timing, and good team”, which is well received by the market.
Good target: Excellent retracement control, leading long-term performance
The data shows that the tracking target of the fund is the CSI Dividend Low Volatility 100 Index. 100 stocks with good liquidity, continuous dividends, high dividend yields and low volatility were selected from the Shanghai and Shenzhen A shares as the index sample stocks, using dividends. Rate / volatility weighting to reflect the overall performance of stocks with high dividend yields and low volatility in the A-share market.
Keeping up with the bull market and keeping it up with the bear market are the intuitive expression of the value of the dividend low-wave strategy investment. On the one hand, the pursuit of fixed income from dividends, rather than the capital gains caused by rising stock prices, so as to share the growth gains of listed companies; on the other hand, the use of low-volatility screening to control stock price risks and grasp the deterministic benefits of dividends .
The historical backtesting data from January 1, 2009 to October 29, 2019 shows that the annualized return of the Low Wave Dividend 100 Index is as high as 15.2%, which has a stable excess return compared to the Shanghai and Shenzhen 300 Index most of the time. The annualized excess return is 11.3%, which is 8.2% relative to the CSI dividend annualized excess return. From the perspective of the largest drawdown during the year, according to China Merchants Securities statistics, from January 1, 2009 to November 11, 2019, in almost every year, the maximum drawdown of the CSI Dividend Low Volatility 100 Index during the year is less than all mainstream market capitalization weights. Broadbase, and excluding 2015, the maximum retracement during the year were controlled within 30%, reflecting its better resistance to falling.
Good strategy: Dividend selection + low wave elimination, clear investment logic
It is worth noting that, unlike the common market value weighting, the index is weighted according to the dividend rate / volatility, which makes the company with higher dividend rate and lower volatility higher in weight, which better reflects the bonus + low wave. The overall investment performance of a strategy.
In terms of investment logic, cash dividends are the basis and source of stocks' investment value, and they are the hardest indicators. They can identify the company's true ability to create value for shareholders at a glance. In this regard, China Merchants Securities also believes that a high dividend rate means that the company can continue to create value for investors through dividends. The companies selected by the dividend factor are basically excellent companies with stable operating conditions and good profitability. The low volatility of the stock price means that the market has no major differences with the company. The company's prospects are generally clear, the main business is clear, the operations in all aspects are relatively stable, and there is not much hype. Through low volatility factors, the portfolio can be effectively reduced. The probability of a company's thunderstorm improves the safety margin of overall investment.
The weighted combination of these two important indicators is to find low-volatility stocks in high-dividend stocks, so that both the fundamentals of the company and the volatility of stock trends can be taken into account at the same time, to achieve the purpose of controlling investment risks, and effectively improve the overall Cost-effectiveness of investment.
It can also be seen from the market performance in the past ten years that the performance of the Low-Volatility 100 Index is significantly better than that of the simple dividend index, which means that by adding consideration of low-volatility factors to the dividend factor, the long-term return level of the index can be effectively improved. .
Good time: low valuation + high dividend strategy usher in the configuration window period
Judging from the issue timing, the current market environment and index characteristics have also ushered in a better allocation window period for the fund. Wind data shows that, as of November 11, 2019, the low-volatility dividend 100 index has a price-to-earnings ratio (TTM) of 7.24X, which is at the historical 6.5% quantile, far lower than the historical median and at a low level. From the perspective of P / B ratio, the current P / B ratio of the index is only 0.88, which is at the historical lowest 0.17% quantile, which is also far below the historical average. It can be seen that regardless of the absolute valuation level or the relative valuation position, the valuation of the overall index is at a historically low level, with a thick safety margin, which is more in line with the relatively stable investment demand of dividend investment as a whole.
As a dividend index, the dividend rate is even more important. China Merchants Securities statistics show that as of November 11, 2019, the index's dividend rate is 4.43%. From the past data, the index's dividend rate has been maintained at about 4%. Starting in the second half of 2018, the index's dividend The yield is already significantly higher than the ten-year Treasury yield to maturity, which fully reflects the configuration value of the product at the current point in time.
In particular, in the context of global easing, nearly 30 central banks, including the Federal Reserve and the European Central Bank, have announced interest rate cuts in 2019, and the People's Bank of China has announced "interest rate cuts" four times in the past 16 days. As interest rates continue to fall, many securities firms have stated that the value of equity asset allocation with high dividends and low volatility is prominent.
Good team: rich management experience, excellent tracking performance
Tianhong CSI Dividend Low Volatility 100 is the first Smart beta fund issued by Tianhong Fund. Prior to this, Tianhong Fund has been immersed in the management of index funds for many years, and has accumulated rich management experience and achieved excellent results. Tracking performance. Wind data shows that in 2018, most of the index funds of Tianhong Fund achieved positive excess returns, while tracking errors were well controlled. On the comprehensive performance indicator of excess returns / tracking errors, Tianhong's index family performance Excellent, most products are at the forefront of similar comparable funds. Relying on a good refined management concept, many of Tianhong's index funds have repeatedly received the highest five-star rating from Haitong Securities. Among them, Tianhong CSI 500 also won the "2018 Open-ended Index Taurus Fund" issued by China Securities Journal this year.
The data shows that the Tianhong Fund Index Investment Team is composed of 3 fund managers and 5 researchers, and has a complete staffing structure. All three fund managers have rich experience in investment management related to index products. Tian Hong CSI Dividend Dividend 100 Fund Manager Zhang Zifa has more than 10 years of experience in index fund management. He currently manages 7 index fund products with a total management scale of 12.24 billion yuan.