On July 17, several products under the Rayleigh Fund released their second quarter reports. Among them, the second quarter report of Rayleigh Balanced Value managed by Zhao Feng showed that China Mobile (00941) remained the largest holding stock, but the number of shares held decreased to 17.5 million shares, marking the fifth consecutive quarter of reduction. In addition, Sinyuan Electric (002028.SZ) was also reduced for the second consecutive quarter, with a decrease in holdings of nearly half. The number of shares held in Ningde Times (300750.SZ), Sinon Bio (300298.SZ), Wanhua Chemical (600309.SH), Weiming Environmental Protection (603568.SH), and China Pacific Insurance (02328) all increased from the previous period, while the number of shares held in Tencent Holdings (00700) remained unchanged. In addition, China Taiping (02601) entered the top ten largest holding stocks, while China Resources Beer (00291) exited. Zhao Feng stated that in the second quarter, they continued to adjust their portfolio structure. They reduced holdings of targets with slow growth, high valuation, weak free cash flow, and also reduced holdings of resource companies with high market expectations and significant stock price increases. They increased holdings of targets with low valuation, excellent free cash flow, and stable business prospects. China Mobile remains the largest holding stock Specifically, the second quarter report shows that by the end of the second quarter, the equity investment portfolio of Rayleigh Balanced Value Three-Year Holding reached 87.21%. In terms of adding or reducing positions, China Mobile remains the largest holding stock of Rayleigh Balanced Value Three-Year Holding, but the number of shares held decreased to 17.5 million shares, marking the fifth consecutive quarter of reduction. In addition, Sinyuan Electric was also reduced for the second consecutive quarter, with a decrease in holdings of nearly half. The number of shares held in Ningde Times, Sinon Bio, Wanhua Chemical, Weiming Environmental Protection, and China Pacific Insurance all increased from the previous period, while Tencent Holdings' number of shares held remained unchanged. In addition, China Taiping entered the top ten largest holding stocks, while China Resources Beer exited. In terms of net asset value, by the end of the second quarter, the net asset value per share of Rayleigh Balanced Value Three-Year Holding mixed A fund was 1.1949 yuan, with a second-quarter net asset value growth rate of 4.12%, compared to a benchmark return rate of 0.69% during the same period; the net asset value per share of Rayleigh Balanced Value Three-Year Holding mixed C fund was 1.1795 yuan, with a second-quarter net asset value growth rate of 4.06%, compared to a benchmark return rate of 0.69% during the same period. Zhao Feng pointed out that in the second quarter, market risk aversion sentiment rose, leading to further differentiation in stock performance. With rising stock prices, the implied returns of state-owned large banks, energy companies such as electricity, coal, and petroleum, and telecom operators continued to decline. Investors seem to pay less attention to the business models and profit stability of related companies, focusing more on short-term cash returns. Considering the quality of company earnings and long-term potential, the pursuit of high dividend companies seems to have some trend implications, rather than solely based on value. On the contrary, Zhao Feng believes that some truly leading companies in their industries have seen their stock prices stagnate, and the dividend yield of these companies is close to or higher than the risk-free rate (if the current bank wealth management and long-term government bond rates are considered as two reference indicators for the risk-free rate). Considering the growth potential and excellent business models of some of these companies, their implied long-term returns may already be significantly higher than some of the high dividend companies currently favored by the market. Despite worries about future prospects, the market currently has a strong aversion to risk and growth, but in the long run, companies with truly global competitiveness have a high possibility of overcoming future operating challenges, creating value continuously through cycles.