On January 19, the four funds managed by Zhang Kun, the fund manager of E Fund Star Fund, disclosed their fourth quarter report for 2023. As of the end of the fourth quarter of last year, the size of Zhang's management was approximately 654.74 billion yuan, a significant decrease of about 10.88 billion yuan compared to 763.54 billion yuan at the end of the third quarter of 2023, a decrease of 14.25%. In terms of positions, the stock positions of the four funds under Zhang Kun remained stable in the fourth quarter of 2023, with adjustments made to the allocation structure of industries such as consumption and pharmaceuticals. In terms of individual stocks, the four funds still focus on holding high-quality companies with excellent business models, clear industry landscapes, and strong competitiveness. According to data, Zhang Kun manages four public funds, including E Fund Blue Chip Selection, E Fund Quality Selection, E Fund Quality Enterprise Three-Year Holding, and E Fund Asia Selection. Apart from the decrease in management size, all four products under his management experienced net redemptions. E Fund Quality Enterprise Three-Year Holding, established in 2020, ended its three-year lock-up period in June 2023 and opened for daily subscription and redemption, with zero subscriptions since then. It experienced net redemptions of 328 million shares in the fourth quarter and 2.028 billion shares throughout the year. The other three products have seen net redemptions for four consecutive quarters since the first quarter of 2023. In 2023, the net redemption amounts of E Fund Blue Chip Selection, E Fund Quality Selection, and E Fund Asia Selection were 19.6 billion shares, 0.48 billion shares, and 4.68 billion shares respectively, totaling 45.04 billion shares including E Fund Quality Enterprise Three-Year Holding. Overall, in terms of holdings, regarding A-shares, Baijiu leaders such as Kweichow Moutai, Wuliangye, Yanghe Brewery, and Luzhou Laojiao remain among his top ten holdings. In terms of Hong Kong stocks, several of his funds increased positions in Alibaba and WuXi Biologics in the fourth quarter, while reducing positions in Tencent Holdings and Hong Kong Exchanges and Clearing. As for U.S. stocks, Advanced Micro Devices entered the top ten holdings for E Fund Asia Selection, with a price increase of more than 43% in the fourth quarter. In comparison, Zhang Kun reduced holdings in Taiwan Semiconductor. In the fund's quarterly report, Zhang Kun mentioned that after the decline in the fourth quarter, the shareholder returns (dividends + buybacks) of some high-quality companies in the fund portfolio have approached or exceeded those of some traditionally high-dividend companies. This suggests that the market may no longer recognize the long-term growth potential of these companies, even expecting some to become "value traps." However, he believes that the competitive moats of these companies remain strong. Therefore, Zhang Kun believes that these high-quality companies are currently priced in the market similar to a "convertible bond," where investors obtain a growth option while receiving coupon returns. Furthermore, looking at the free cash flow returns, the overall free cash flow returns (free cash flow/market value) of the portfolio are also at historically high levels. Thus, from various valuation perspectives, the undervaluation of a group of high-quality companies already reflects quite pessimistic expectations. Zhang Kun stated that many high-quality companies in global markets still maintain higher valuation premiums compared to ordinary companies, but the valuation premiums for Chinese high-quality companies have converged to very low levels, and even completely disappeared for some companies. Investors have shifted from believing in the long-term high certainty growth of high-quality companies to almost no longer believing, even reflecting expectations of a "value trap" in the pricing of some companies. In response to this situation, he believes that many factors should be carefully considered in the long term, but investing in high-quality companies no longer requires "expecting great results," simply "believing in ordinary results" is sufficient.