The letter to the fund holder: Why did I not rotate?

Liu Ziqiang, Manager of Huabao Power Group Fund

Dear fund holder:

In the fourth quarter of last year, I took a rotation of the portfolio and switched the investment direction from the popular track stocks and resource stocks to the defense variety represented by real estate. This time the rotation laid some of my advantages in the first half of this year.

In the middle of this year, I adjusted the combination again, and began to shift from the direction of defense to the growth direction. This time the rotation also produced a good effect. However, with the recent market adjustment, the mainstream tracks of growth collapse one by one, and my fund has also been impacted.

Is it time to rotate the combination again? I don't think so.

Comparing one at the end of last year and the present, I found that there was a big difference. At the end of last year, the valuation of track stocks had reached a very high level. Taking the indicator of the new energy vehicle, the Ningde era as an example. The total market value of the end of last year was 1.6 trillion yuan. At that time, everyone estimated that this year's performance was about 30 billion yuan, more than 50 times the valuation. At present, the market value of Ningde Times is 1.2 trillion yuan. Everyone is estimated to be about 40 billion yuan for its performance next year, 30 times the valuation. The valuation level has dropped by about 40%.

Standing at the end of last year, looking forward to the first and second quarters of this year, I have a great concern. It was the overheated economy in the first half of last year. At the end of last year, real estate sales fell sharply, exports declined significantly, and consumption was small. Therefore, the next year -on -year data will be very ugly for two consecutive quarters. This projected into the performance of listed companies is a period of great performance pressure.

At this time, we look back at three quarters, which is the opposite. In the fourth quarter of last year, and the first and second quarters of this year, it was a period when the economic base was very low. After the gradual resolution of real estate problems and the gradual recovery of the epidemic interference economy, we may have a process of gradual economic indicators for three consecutive quarters.

The fundamentals are upward, valuation adjustment to normal levels, and liquidity is still loose. I think it is not a high -risk moment at the end of last year.

So why is the market falling now? I think that on the one hand, the market rebounds all the way, lack of adjustments, and lack of chips at the bottom of the re -distribution process. The trend of traveling is obvious, and the phenomenon of small fried and frying concepts has increased the local foaming.

Therefore, the current adjustment may be able to clean the floating chips and resolve conceptual speculation foam. In the process, some high -quality track faucets may be killed by emotions, but they will also bring better opportunities for the future. Therefore, there is no need to overly panic. The best strategy may be: properly controlling positions, waiting for the vent of market emotions, high -quality growth varieties that are wrongly killed after stability, waiting for the realization of value.

Thank you for your trust and support. In this torment, I will still devote myself to the heavy trust of investors. Thanks!

Fund Manager Liu Ziqiang

2022.8.31

The Huabao Power Group Fund (A share: 240004, C share: 016257) managed by Mr. Liu Ziqiang's 16 years since its establishment of more than 13 times the positive income. As of the last six months of the end of June 2022, a total of 9.33%was returned, ranking 7th in 1184 similar funds; the revenue in the last one year was 30.84%, and the 11th of 976 similar funds ranked 11th; In the top 12%of the 451 similar funds, it was also the highest rating of Galaxy Securities, China Merchants, Tianxiang Investment Guins, and Shanghai Securities in three years, five -year, and ten -year five -star rating of Haitong Securities.

Mr. Liu Ziqiang is the "double ten" fund manager on the market. From 2012 to 2021, the entire market returned to the 300s of the Shanghai and Shenzhen 300 index and the annualized return rate of more than 10%. The fund manager has only had 25 "double ten" funds that have been in successive 10 years in a row. The power portfolio fund is one of them.

Note: The "Double Ten" fund manager of the share foundation pointed out that the management of the same stock fund (including partial stock hybrid funds) for more than 10 years and the fund's annualized income of more than 10%since the establishment of the fund.

Data source: Galaxy Securities, Huabao Fund, Wind, fund holding information from the fund's regular report; statistics as of: 2022.6.30, the data has been reviewed by the custody bank. Huabao Power Combination Fund was established in 2005.11.17; the performance comparison benchmark is: the circulation market value of the Shanghai Stock Exchange 180 index yield and the deep syndromes 100 indexes, weighted the average*80%+Shanghai State Treasury Bond Index yield*20%, the fund classification is partially partial Stock funds (60%-95%of the upper and lower limits of the stock) (Class A); Liu Ziqiang has served as the fund manager of the Huabao Power Group Fund since 2008.3.19. Huabao Power Group Fund has served as the fund manager of the fund (2005.11.17 to 2008.3.19) and Liu Ziqiang (2008.3.19 to the present).

Nearly 5 full annual investment returns and benchmark returns of Huabao Power Group Fund are: 2017, -10.49%/17.08%; in 2018, -23.62%/-18.66%; 2019, 38.43%/29.55%; 2020 2020 In the year, 48.37%/23.65%; in 2021, 25.44%/-181%. Similar funds are partial stock funds (60%-95%of the upper and lower stocks) (Class A). Rating data source: each rating agency. The rating time of Haitong Securities was 2022.6.30; the rating time of Galaxy Securities was 2022.6.30; the rating time of China Merchants Securities was 2022.6.24; the rating time of Tianxiang Investment Consulting was 2022.6.30; the rating time of Shanghai Securities was 2022.3.31. Risk reminder: This product is issued and managed by Huabao Fund, and the agency of the agency does not bear the responsibility for investment, redemption and risk management of the product. Investors should carefully read the legal documents such as the Fund Contract, the Recruitment Manual, and the Fund Product Information Outline, and understand the fund's risk income characteristics, and choose products that are compatible with their own risk tolerance. Fund's past performance does not indicate its future performance, and fund investment needs to be cautious! The fund's risk level evaluated by the fund manager is R3-mid-risk.

The point of view of this article is the personal point of view of the fund manager. It does not represent the investment plan of its management fund. The company's integrity and accuracy of this information do not guarantee any guarantee, nor does it guarantee that the relevant viewpoints or analysis judgments will not change or update, which does not mean that our company does the opinion of. The viewpoints, analysis and predictions in the article do not constitute investment recommendations for readers, such as involving individual stock contents and inaction suggestions. Our company and employees do not make any form of risk commitments and benefits of any investment in this content, and do not bear any responsibility for direct or indirect losses caused by the content of the content. Before investing in funds, please carefully read the fund contract and recruitment instructions to understand the fund product conditions, the fund investment scope, and choose the fund products that are suitable for your own risk preferences. Fund's past performance does not indicate its future performance, and fund investment needs to be cautious.

Sales institutions (including fund manager direct sales agencies and other sales agencies) conduct risk evaluation of the fund in accordance with relevant laws and regulations. Investors should pay attention to the consistency of the sales institutions in time, and the fund product risk issued by the fund sales agency The results of the grade evaluation shall not be lower than the risk grade evaluation results made by the fund manager. There are differences in fund risk income characteristics and fund risk levels due to different considerations.

Investors should understand the fund's risk income, combine their own investment purposes, periods, investment experience, and risk tolerance, and to be cautious, and based on their matching results, various sales institutions have selected fund products and bear their own risks. The China Securities Regulatory Commission's registration of the fund does not show its funding, market prospects, and income of the fund's investment value, market prospects, and income. Fund investment needs to be cautious.

- END -