From South China Morning Post: 2024-07-29 19:30:08

Mutual funds in China increased holdings of electronic stocks in Q2, boosting allocations to 15.36%. Funds also added positions in telecoms and high-dividend plays as bond yields fell. Food and drink makers saw a sell-off. Fund managers capitalized on global AI demand, adding Luxshare and Foxconn while offloading consumer stocks due to weak economic indicators.

BYD was the top addition to mutual funds’ portfolios in Q2. Funds had the biggest exposure to electronics, followed by pharmaceuticals and food/beverages. BYD, Foxconn, Tencent, and Luxshare were key stock additions. Liquor distillers like Kweichow Moutai saw significant position cuts.

Onshore mutual funds held 193.7 billion yuan in Hong Kong-listed stocks by June, up 36.2 billion yuan from Q1. Tencent and CNOOC were the largest holdings. The trend towards high-dividend stocks is expected to continue for the rest of the year as investors seek to hedge against uncertainty.

Long-term investors, including insurers, are likely to continue inflows into dividend strategies, while short-term investors may add defensive exposure in related sectors and stocks in the second half, according to UBS analysts. With few catalysts for stock movement, high-dividend plays are set to gain traction.



Read more at South China Morning Post: China’s mutual funds add electronics, pare consumer stocks exposure in quarterly rejig