Zhonggeng Value Navigation Mixed Fund, an AI fund, has disclosed its first-quarter report for 2026. By the end of the quarter, the fund's size reached 5.02 billion yuan, generating a profit of 249 million yuan. The weighted average profit per fund share for the period was 0.2023 yuan. During the reporting period, the fund maintained its positive outlook on the profit recovery logic within the manufacturing sector, as well as on resource stocks represented by non-ferrous metals and sectors like AI. Five stocks newly entered the top ten holdings, including Shanjin International Gold Co.,Ltd. becoming the largest holding and Zijin Mining Group climbing to fourth place. As of the report period end, the net asset value per share of Zhonggeng Value Navigation Mixed Fund was 3.6570 yuan. The fund's net asset value per share growth rate for the reporting period was 7.41%, compared to the performance benchmark's return of -2.48% for the same period.
Regarding holdings, the fund's top ten major holdings included: Shanjin International Gold Co.,Ltd., Hanlan Environment, Honglu Steel Structure, Zijin Mining Group, Jiayou International Logistics, Shangtai Technology, Seazen Holdings, Tencent Holdings, Alibaba Group, and China Merchants Bank. Shanjin International Gold Co.,Ltd., Zijin Mining Group, Jiayou International Logistics, Seazen Holdings, and China Merchants Bank were the five stocks newly entering the top ten. In terms of position adjustments, holdings in Hanlan Environment and Shangtai Technology nearly doubled; the former retained its position as the second-largest holding, while the latter fell to sixth place. Additionally, the fund expressed optimism about the impact of the AI industry wave, increasing its positions in Tencent Holdings and Alibaba Group. On the reduction side, the fund slightly decreased its holdings in Honglu Steel Structure.
Fund manager Liu Sheng stated that he continues to be optimistic about the profit recovery logic in manufacturing, with focused sub-sectors including chemicals and other midstream industries, as well as the new energy sector. He also看好 companies capable of capturing value and growth during high-growth phases, such as resource stocks exemplified by non-ferrous metals and AI-related sectors. He indicated that current resource prices are already quite attractive for new supply, but medium-term capacity expansion still depends on securing sufficient production factors (mineral discoveries, energy, etc.). Current new capacity additions have not worsened the supply-demand balance sheet, and mining enterprises with growth potential still have opportunities to benefit from both volume and price increases. Concurrently, the AI industry wave remains fervent, and its wide-ranging impacts will be closely monitored.
The capital market saw a positive start in 2026, with resource and technology sectors rising together, but volatility increased later in the quarter. By the end of Q1, the equity risk premium for the CSI 800 Index reached 0.33 standard deviations, with a dividend yield of 2.4% for the CSI 800. The 10-year government bond yield was only 1.82%, putting the earnings-to-bond yield ratio at the 92nd percentile. While risk compensation levels decreased after the market rise, equity assets still hold an advantage, warranting active allocation. He noted that the Hang Seng Index's trailing twelve-month (TTM) P/E ratio is 12.2 times. In recent months, the Hong Kong stock market showed significant divergence, with the Hang Seng Index fluctuating at higher levels while the Hang Seng Tech Index continued to decline. The price-to-book (PB) valuation of the Hang Seng Tech Index has fallen below its median, suggesting it presents allocation value.
Liu Sheng also pointed out that the market experienced a rise followed by a pullback in the first quarter, with the fund's net asset value also rising and then fluctuating lower. He tends to believe the potential impact might be limited, but the uncertainty of war could still bring tail risks, especially as prolonged duration would have greater effects on the macroeconomy and capital markets, requiring dynamic assessment and adjustment. Even with short-term market uncertainties, confidence in the long-term outlook remains. For future investment strategy, the fund will base its approach on a low-valuation value investment strategy. By emphasizing fundamentals and valuation, appropriately assuming risks, and selecting investment opportunities with skewed risk-return profiles towards high expected returns, the fund aims to construct a portfolio striving for sustainable excess returns.
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