On July 21st, the second-quarter portfolio adjustments for products managed by prominent fund manager Liu Yanchun were disclosed. The quarterly reports indicate that while continuing to hold onto leading consumer stocks, some of the funds managed by Liu Yanchun have undergone a significant style shift. Notably, after appointing a co-manager, the Invesco Great Wall Dingyi Hybrid Fund pivoted heavily towards technology and growth sectors, with its top ten holdings almost completely changed.
Meanwhile, the Invesco Great Wall Emerging Growth Fund, which Liu has managed long-term, maintained a high allocation to the liquor giant Kweichow Moutai Co.,Ltd. (SH: 600519), but reduced holdings in some other baijiu stocks, showing some divergence within the portfolio.
Invesco Great Wall Emerging Growth Maintains Heavy Moutai Position, Cuts Shanxi Fenjiu and Wuliangye
According to the Q2 report for the Invesco Great Wall Emerging Growth Hybrid Fund, by the end of the quarter, the fund's equity position remained high, with Moutai still its second-largest holding. The report shows the fund made only a minor reduction in its Moutai position during Q2, cutting less than 40,000 shares. By quarter-end, the fund still held approximately 870,000 shares of Moutai. Based on the end-of-quarter share price, this position accounted for 9.58% of the fund's net asset value, indicating Liu Yanchun's continued high level of confidence in Moutai's long-term competitiveness.
However, the fund made structural adjustments within the baijiu sector. It reduced its holdings in Shanxi Xinghuacun Fen Wine Factory Co.,Ltd. (SH: 600809) by about 2.6 million shares, a notable decrease. Concurrently, Wuliangye Yibin Co.,Ltd. (SZ: 000858) exited the fund's list of top ten holdings.
In the quarterly report, Liu Yanchun stated that the pricing of domestic equity assets already largely reflects the development prospects of both emerging and traditional industries. The pricing of the hottest AI-related industry chains incorporates expectations for sustained high demand growth over many years and the maintenance or even improvement of high profitability due to tight supply. The pricing of domestic demand-related industries, however, reflects expectations of continuously declining profits, with the market already pricing in the current low growth environment, negative population growth, an aging population, and the potential risk of declining white-collar income due to AI development. The K-shaped divergence between industries is expected to gradually converge in the future.
Invesco Great Wall Dingyi Executes Major Portfolio Overhaul, Shifting from Consumer Leaders to Tech Growth
Compared to the steady adjustments in the Emerging Growth fund, the changes in the Invesco Great Wall Dingyi Hybrid Fund's portfolio in Q2 were more pronounced. Previously, at the end of Q1, the fund still followed Liu Yanchun's typical major-consumer investment style, with its top ten holdings concentrated in baijiu leaders like Moutai and Shanxi Fenjiu, alongside consumer sector companies like China Tourism Group Duty Free. However, by the end of Q2, the fund's top ten holdings list had undergone a complete transformation. Consumer stocks were largely removed from the core portfolio, with the fund shifting towards semiconductors, computing power, new energy, and advanced manufacturing.
The quarterly report shows that as of June 30th, the fund's top ten holdings were, in order: Konfoong Materials International Co.,Ltd. (SZ: 300666), Zhongji Innolight Co.,Ltd. (SZ: 300308), Ningxia Orient Tantalum Industry Co.,Ltd. (SZ: 000962), Piotech Inc. (SH: 688072), Yantai Jereh Oilfield Services Group Co.,Ltd. (SZ: 002353), Contemporary Amperex Technology Co.,Ltd. (SZ: 300750), Sichuan Xinjinlu Group Co.,Ltd. (SZ: 000510), Fujian Wanchen Food Group Co.,Ltd. (SZ: 300972), China Tungsten And Hightech Materials Co.,Ltd. (SZ: 000657), and Circuit Fabology Microelectronics Equipment Co.,Ltd. (SH: 688630).
From the portfolio structure, semiconductor materials, advanced manufacturing, and the AI computing power industry chain became the primary focus. Among these, Zhongji Innolight benefits from growing demand for high-speed optical modules in AI data centers, while companies like Konfoong Materials and Piotech are positioned in semiconductor equipment and materials. The overall style of the portfolio stands in stark contrast to its previous major-consumer configuration.
In the report, Liu Yanchun commented that after three years of rapid development, North American large language model companies have entered a stage of commercial model closure this year. Leading companies, represented by Anthropic, are experiencing rapid revenue growth and are expected to reach profitability, driving explosive growth in AI inference demand. He expressed firm optimism about investment opportunities in the computing power industry both domestically and internationally, particularly in the semiconductor materials and equipment sectors. Benefiting from the expansion cycles of global memory and advanced logic leaders, these sectors are poised for a prolonged period of favorable conditions. In some niche areas, leading companies have already achieved global competitiveness and, beyond import substitution, have the potential to narrate a long-term growth story of increasing global market share.
Fund Net Value Rises Rapidly Following Appointment of Co-Manager
The significant portfolio adjustment of the Invesco Great Wall Dingyi Hybrid Fund is closely linked to changes in its management team. On May 9th, Invesco Great Wall Fund announced the appointment of a co-manager for the Dingyi fund. Subsequently, the fund's investment style changed rapidly. Data shows that from May 9th to June 30th, the net value of the Invesco Great Wall Dingyi Hybrid Fund rose by 26.51%, significantly benefiting from the recovery in the technology and growth sectors since Q2.
By the end of Q2, the Dingyi fund maintained a high equity position, with equity assets accounting for over 90% of the portfolio. The combined weight of its top ten holdings represented a high proportion of the fund's net asset value, indicating active participation in the technology and growth sectors.
In contrast, the Invesco Great Wall Emerging Growth Fund also maintained a high equity position at the end of Q2, continuing its concentrated stock-picking strategy. Moutai alone accounted for nearly 10% of the fund's net asset value, with consumer leaders remaining at the core of its portfolio.
A New Phase for Liu Yanchun's Investment Style?
Liu Yanchun has long been viewed by the market as a representative fund manager in the consumer sector, with his products historically heavily weighted in major consumer industries like baijiu, home appliances, and duty-free. However, with the accelerated development of industrial trends such as AI, new energy, and advanced manufacturing, some of his products have recently begun to show clear sector rotation.
Market observers believe the major portfolio overhaul of the Invesco Great Wall Dingyi Hybrid Fund in Q2 reflects the management team's focus on changing industrial trends. On one hand, traditional consumer industries are entering a phase of valuation digestion after a period of high growth. On the other hand, sectors like artificial intelligence, domestic substitution in semiconductors, and advanced manufacturing are experiencing upward industrial cycles.
Nevertheless, the Invesco Great Wall Emerging Growth Fund's continued high allocation to consumer leaders like Moutai indicates that Liu Yanchun has not completely abandoned his consumer investment framework but is implementing differentiated strategies across different products.
Looking ahead, whether Liu Yanchun's funds can achieve sustained outperformance through their technology and growth sector allocations will depend on observing industrial conditions, companies' ability to deliver profits, and shifts in market style. The portfolio adjustments in Q2 serve as an important signal of his investment system expanding from a singular consumer focus towards a more diversified growth-oriented approach.
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