Another point of view of investing in the base: choosing the theme fund

Fund investment is a better way for us to invest in the uncertain volatile environment of the bull and bear market. however, investing in a single company will worry about the black swan incident, and choosing a market index fund is too "Sea King" and has no focus. The industry-themed fund is a unique and balanced existence between the two, much like the cards we collected when we were kids eating crispy noodles, collecting seven summoned returns. Let's take a look at the industry-themed fund with Niuniu.

What is the industry theme fund?

What is an industry-themed fund? Industry-themed fund is a term relative to industry-wide funds. The so-called "industry-wide" refers to a fund that contains a wide range of industries and scattered industries, such as SSE 50, Shanghai and Shenzhen 300, and so on.

While industry funds refer to funds that mainly invest in stocks in a certain industry, such as pharmaceutical industry, consumer industry, or military industry, finance, etc., while theme funds focus on stocks related to a certain theme, such as gold, artificial intelligence, and now more popular new infrastructure, and so on, the division of these industries and themes can meet the personalized needs of investors for investment targets.

How to identify industry-themed funds?

How to distinguish which of so many kinds of funds are industry-themed funds? The easiest way is to look at the classification of securities firms. For example, under the fund of Futu Niuniu, it is divided into medical, gold, technology and other topics:

In addition, we can also look at the summary of fund product information to make a judgment.

If you see words such as "no less than 70 per cent of non-cash fund assets invest in stocks in XXXX-related industries" in the fund profile. Seeing this, it is basically confirmed that it is an industry-themed fund.

Look at the fund information this move is very important, all aspects of the fund will be agreed in the contract, investment scope, benchmark, investment strategy, objectives, fee costs, and so on, are closely related to our ordinary investors. At the same time, in the fund briefing, you can also directly see the sub-areas of the fund investment.

From the previous quarterly reports to see the industry concentration, through the shareholding details to judge the industry theme fund. Valuing position stocks can also help us eliminate some "pseudo-industry-themed funds" and see which industries fund managers are better at through heavy positions.

Advantages and risks of Industry theme funds

The number and types of the fund market are dazzling, and it is easy to pick a blind eye. At this time, if we have a preferred industry direction, then relatively speaking, it will be much easier for the choice of funds, and it can also give better play to the advantages of industry-themed funds.

To put it simply, the biggest advantage of industry-themed funds is high investment concentration and high income elasticity. If the industry benefits, the corresponding industry-themed funds may achieve higher excess returns in a short period of time. For example, the pharmaceutical and consumer industries have risen astonishingly so far this year. If you can seize the opportunity to enter the market, it is not a dream to double your income.

At the same time, high concentration is a double-edged sword, which is both an advantage and a risk. As most of the funds are concentrated in one industry / theme sector, the investment variety is relatively single, and it is difficult for an industry to stand out for a long time and some industries are cyclical, and the cycle length of different industries varies. If investors choose a single industry fixed investment fund, and once the investment plan does not match the industry cycle, it will have a great impact on fixed investment returns.

In addition, short-term timeliness risks may occur. For example, affected by some policies or hot spots, related industry themes soar, but when the heat dissipates, the driving force supporting the rise is gone, and then it may fall. If you simply invest in an industry, you may also encounter a "black swan" incident, which are all risks that we need to pay attention to. For example, the medical and medical sector made a sharp correction in mid-late June, with spillover funds flowing into consumer electronics, semiconductors, 5G and other sectors. High-level pharmaceutical stocks and early strong stocks fell across the board, and many stocks fell by the daily limit, and ultra-short sentiment began to release risks.

Therefore, compared with industry-wide funds, the risk of industry-themed funds is also higher, but generally speaking, the risk is lower than that of single company stocks, so it is worth paying attention to as the main player of value investment.