Three types of holding strategies for high-dividend strategy stocks Looking at the recently published annual reports of public funds, although many funds hold large-cap state-owned enterprises as representatives of high-dividend strategy stocks, their holding strategies can be roughly divided into three categories: The first category is to stick to investing in large-cap state-owned enterprises as representatives of high-dividend strategy stocks, despite changes in the market. These funds have more cyclical performance characteristics. While they benefit from the recent dividend stock industry, their performance can lag behind during periods when the market favors growth stocks. The second category is to gradually shift towards large-cap state-owned enterprises after the dividend strategy was gradually accepted in the fourth quarter of last year. These funds may miss the "first half" of the dividend strategy market and even have the risk of chasing after price increases. The third category is to position on the left side. In the first half of last year, when the dividend strategy was not yet widely accepted, these funds positioned themselves in large-cap state-owned enterprises in advance. These funds often achieve good investment performance due to the forward-looking investment vision of the fund managers. Considering the risks of downward movements and investment opportunities with certainty when changing positions Comparing the holdings and annual report views of funds for the quarters of 2022 and 2023, we found that the Zhong Ou Rui Feng Flexible Allocation Mixed Fund gradually switched its portfolio to large-cap state-owned enterprises with a dividend style starting from the second half of 2022. In the annual report released this time, fund manager Lu Chunqing reviewed the process of positioning in large-cap state-owned enterprises last year and seizing investment opportunities. "Looking back at 2023, the entire growth style has experienced some adjustments and tests. In the context of global demand slowing down, we are still looking for long-term engines to power the future economy. In this process, we continue to experiment, explore, and conduct in-depth research in investments." As a fund manager who used to primarily invest in growth companies, Lu Chunqing feels that it has become more difficult to achieve excess returns in growth stock investments. However, she also understands that fund investment cannot stop, so she has optimized the fund's strategy moderately. "In terms of selecting investment targets, we will consider more the risks of downward movements and opportunities with certainty." In line with the needs of high-quality development of the Chinese economy, while considering the risks of downward movements and opportunities with certainty, Lu Chunqing has indeed discovered a group of high-quality growth companies of the new era, "they are concentrated in large state-owned enterprises, high dividend type companies. Many of these companies also have growth in revenue, industry entry barriers, monopoly resources, and high-tech additions, as well as excellent management." In this framework, she gradually optimized the direction of portfolio investment. After adjusting the composition of the holdings, Lu Chunqing admitted, "I believe that these attempts have expanded the capabilities of the fund managers to a certain extent. At the same time, we have firmly sold some sectors that we think we are good at but may no longer be in a short-term favorable trend and may have lower-than-expected performance. These active changes have pushed us out of our comfort zone and strive to provide better investment returns to customers." The investment performance thereafter also confirmed the assistance of adjusting the composition of holdings to investment performance. According to the data verified by the fund custodian, by March 19, the net asset value growth rate of Zhong Ou Rui Feng in the past six months reached 7.64%, while the Shanghai and Shenzhen 300 Index return rate was -3.25%, surpassing the Shanghai and Shenzhen 300 Index by more than 10%. Three major investment logics reveal future stock selection ideas Looking ahead to 2024, Lu Chunqing also revealed the future investment logic in the annual report, "1) Business cycle logic: we prefer companies that are benefiting from the upward economic cycle and can ultimately benefit from profits; screen industry, shipbuilding, consumer electronics, and home appliance sectors benefit from new products or entering broader global markets; 2) Cycle industries with low valuation logic: when we cannot find more industries with a higher business cycle, we will focus some holdings on companies with supply constraints, sustained high profits, high dividends, and low valuation; after all, although demand is uncertain, the supply bottleneck makes them likely to provide more stable performance. 3) High-quality development of state-owned enterprises: as the mechanisms of state-owned enterprises gradually become clearer and state-owned enterprises pay more attention to their performance in the capital market, some companies that have lacked long-term investor attention and research, with lower valuations and barriers, are receiving attention." Although as a broad fund, Zhong Ou Rui Feng Flexible Allocation Mixed Fund may not always stick rigidly to the high dividend strategy of large state-owned enterprises, the forward-looking prediction successfully made by fund manager Lu Chunqing in the first half of last year also demonstrates her research foundation of over 10 years. Finally, in the annual report, she expressed that in the future, the portfolio construction of Zhong Ou Rui Feng Flexible Allocation Mixed Fund will adhere to the principle of "seeking certainty first, then seeking change," hoping to bring more solid investment returns to investors. Funds have risks, and investments need to be cautious. The fund manager promises to manage and use the fund's assets based on the principles of honesty, diligence, and responsibility, but does not guarantee that the fund will always be profitable or that it will have the lowest returns. Past performance of the fund does not indicate its future performance, and the performance of other funds managed by the fund manager does not guarantee the performance of the fund. Before making investment decisions, please carefully read the legal documents and risk disclosures, such as the fund contract, fund prospectus, and fund product summary. Understand the risk-return characteristics and product features of the fund, carefully consider the various risk factors associated with the fund, and consider your risk tolerance based on factors such as investment objectives, investment horizon, investment experience, and asset status. Based on an understanding of the product and appropriate sales advice, make rational and cautious investment decisions. This fund is a mixed fund, and its expected returns and risk level are higher than bond funds and money market funds but lower than stock funds. Data source: Fund custody review. The net value growth rate of Zhong Ou Rui Feng flexible allocation mixed (LOF) fund A since its establishment is 36.37%.Performance benchmark 1.63%. The fund's performance from 2019 to 2023 compared to the benchmark showed 59.89%/21.49%, 52.89%/16.24%, -2.92%/-1.95%, -25.97%/-13.01%, -5.67%/-6.03%. Former fund managers: Lu Chunqing from 2021/08/11 to present, Zhou Weiwen from 2017/07/31 to 2022/03/18. Since its establishment, China-Europe Richfond Flexible Allocation Mixed (LOF) C has seen a performance increase of 32.11%, compared to the benchmark of 1.63%. The fund's performance from 2019 to 2023 compared to the benchmark showed 59.11%/21.49%, 52.18%/16.24%, -3.4%/-1.95%, -26.33%/-13.01%, -6.14%/-6.03%. Former fund managers: Lu Chunqing from 2021/08/11 to present, Zhou Weiwen from 2017/07/31 to 2022/03/18. The investment scope of this product was modified in October 2020 to include depositary receipts as investment targets. Please refer to the legal documents for details."Je ne parle pas franais." "I do not speak French."