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NOTE

Active Fund Managers

English translation of the original VNote “Active Fund Managers”, preserving its structure with only necessary small corrections.

InvestingCreated Updated 5 min readhistorical

This is a historical learning note and may contain outdated or incomplete understanding.

1. Active Fund Manager Recommendations

  • If a fund manager manages multiple funds, their holdings are generally similar and cannot be too dispersed, because a fund manager’s attention is limited.
  • A fund’s size should not become too large, otherwise it is difficult to operate. For large-cap funds, RMB 8 billion is relatively high; for small-cap funds, RMB 4 billion is relatively high.
  • Choose fund managers who invest across mixed industries. As long as the portfolio is not restricted to one industry, the manager can use allocation changes to control drawdowns.

2. E Fund

  • Zhang Kun
    • Graduated from Tsinghua University in biomedical engineering.
    • Funds
    • Characteristics
      • Bottom-up.
      • Low turnover.
        • How does he judge whether a company deserves to enter the candidate pool? There are roughly three criteria:
            1. Over the past 5-10 years, average ROIC is no lower than 10% and has not fluctuated sharply.
            1. Exclude companies with excessively high leverage. He does not favor asset-heavy businesses with large amounts of debt, and prefers companies that grow organically by accumulating cash flow through their own operations.
            1. Sufficiently strong industry position, with a deep moat and barriers to entry.
      • High individual-stock concentration, with the top ten holdings around 70%.
      • Emphasizes a margin of safety and drawdown control.
      • Circle of competence
        • Missing opportunities outside one’s competence.
        • Failing to do well within one’s area of competence.
        • Entering an unfamiliar area and making mistakes.
  • Xiao Nan
    • Master’s degree in economics.
    • Funds
    • Characteristics
      • Focuses on the broad consumer sector and has deep understanding of food and beverages.
      • High concentration by both industry and individual stock.
    • Bottom-up.
    • Compared with Zhang Kun
      • Higher allocation to baijiu.

3. Invesco Great Wall

  • Liu Yanchun
    • Master’s degree in management from Peking University.
    • Funds
    • Characteristics
      • Bottom-up.
      • Tries to invest within his circle of competence while continuously expanding it.
      • Emphasizes fundamentals.
    • vs. Zhang Kun
  • Yu Guang
    • Bachelor’s degree in economics from Guangdong University of Business Studies and an MBA in banking and finance from Bangor Business School, University of Wales.
    • Characteristics
      • Relatively similar to Lei Ming.
      • Invests with the perspective of an industrial operator.
      • Bottom-up stock selection.
    • Funds
  • Yang Ruiwen
    • Master’s degrees in engineering and science.
    • Characteristics
      • Prefers growth stocks with medium-to-high valuations and medium-to-small market capitalizations.
      • Somewhat similar to Lao Jienan.
    • Funds

4. First State Cinda

  • Feng Mingyuan
    • Master’s degree in engineering from Zhejiang University.
    • Funds
    • Characteristics
      • Diversified holdings; the top ten holdings account for only about 26%.
      • Bottom-up.
      • Prefers small- and mid-cap growth stocks.
      • Trading ability, with annualized turnover around 3-5 times.
      • Circle of competence.

5. Ruiyuan Fund

  • Fu Pengbo
    • Master’s degree in economics.
    • Characteristics
      • 50% core holdings: selected high-quality companies intended to create long-term excess returns.
      • 20% holdings: companies temporarily undervalued, expected to provide returns as valuations recover.
      • Remaining holdings: mainly companies driven by market or policy themes, commonly called hot themes, viewed from a short- to medium-term perspective.
    • Funds

6. Xingquan Fund

  • Dong Chengfei
    • Master’s degree in science from Shanghai Jiao Tong University.
    • Characteristics
      • Stable.
      • Circle of competence.
      • Balanced; not confined to a single investment style.
        • Both long-term holding and some market timing.
        • Considers both valuation and growth potential; invests in both value and growth.
      • Combines top-down and bottom-up approaches.
    • Funds
  • Xie Zhiyu
    • Finance engineering at Fudan University; master’s degree in economics.
    • Characteristics
      • Diversified holdings.
    • Funds
  • Ren Xiangdong
    • Master’s degree in finance from Shanghai Jiao Tong University.
    • Characteristics
      • Institutional investors hold more than 50%.
      • GARP: growth at a reasonable price, combining value and growth investing.
      • Contrarian investing: focusing on what may happen in the future rather than following the crowd.
      • Bottom-up.
      • Company valuation:
        • In addition to traditional P/E, P/B, and P/S ratios, use replacement value to estimate a company’s lower-bound value and M&A value from industrial capital to estimate its upper-bound value.
      • The essence of a moat is monopoly.
    • Funds

7. BOCOM Schroders

Focuses on growth stocks.

  • Wang Chong
    • PhD in finance from Peking University.
    • Characteristics
      • Controls systemic risk top-down, and selects high-growth industries/companies from meso and micro perspectives bottom-up.
      • Position level controlled around 70%.
      • Diversified by industry, generally mainly investing in 5-10 industries.
      • Concentrated by individual stock, with top ten holdings above 50%.
      • Contrarian investing.
      • Emphasizes drawdown control.
    • Funds
  • Yang Hao
    • Communications and information systems at Beijing University of Posts and Telecommunications.
    • Characteristics
      • TMT (Technology, Media, Telecom).
      • Growth-stock investing.
      • Strong drawdown control.
    • Funds
  • He Shuai
    • Master’s degree from Shanghai University of Finance and Economics.
    • Characteristics
      • Growth-stock investing.
      • Position level controlled between 60%-80%.
    • Funds
    • Comparison

8. China Europe Fund

  • Zhou Weiwen
    • Master’s degree in management science and engineering from Peking University.
    • Characteristics
      • Top-down. Most excess return comes from stock selection within industries and industry rotation.
      • Industry prosperity.
      • Left-side positioning.
    • Funds
  • Zhou Yingbo
    • Master’s degree in control theory and control engineering from Peking University.
    • Characteristics
      • Holding style shifted from small-cap growth to large-cap value and mid-cap growth.
      • Industry coverage expanded from a few industries to stock selection across all industries.
      • Stock-selection logic gradually shifted from industry rotation to bottom-up stock selection.
      • Trading frequency shifted from high turnover to low turnover.
    • Funds
  • Cao Mingchang
    • Characteristics
      • Performance weakened while training younger managers.
      • Low risk preference.
      • Mainly bottom-up stock selection.
  • Wang Pei
    • Master’s degree in polymer physics and chemistry from Fudan University.
    • Characteristics
      • Growth stocks.
        • Some so-called small- and mid-cap innovation-board names cannot simply be equated with “growth.” Only companies that can continuously use high growth to absorb their valuation can be called high-growth companies.
        • One group benefits from technological progress lowering costs; another benefits from monetary expansion.
      • Cycle theory.
      • Four quadrants: cycle, value, growth, consumption.
    • Funds
  • Ge Lan
    • Bachelor’s degree in engineering physics from Tsinghua University and PhD in biomedical engineering from Northwestern University.
    • Characteristics
      • Strongly optimistic about future opportunities in healthcare.
      • In industries serving government customers, when customers are relatively monopolistic and powerful, pharmaceutical companies have weak bargaining power and little pricing power, which suppresses profits.
      • Emphasizes top-down monitoring of regulatory-policy changes while using professional bottom-up analysis to assess company value.
    • Funds

9. Fullgoal Fund

  • Yu Yang
    • Bachelor’s degree in biopharmaceuticals from the School of Life Sciences at Nanjing University.
    • Characteristics
      • Healthcare industry.
      • Relatively young.
      • Had left the firm.
    • Funds
      • Fullgoal Precision Healthcare.
  • Zhu Shaoxing
    • PhD in management.
    • Characteristics
      • Bottom-up.
      • Growth-oriented.
        • Growth-stock investing.
      • Downplays market timing.

10. China Universal Fund

  • Lei Ming
    • Master’s degree in management from Huazhong University of Science and Technology.
    • Characteristics
      • Medium- to long-term absolute return.
      • Growth stocks.
      • Contrarian investing.
    • Funds
  • Lao Jienan
    • Bachelor’s and master’s degrees in economics from Fudan University.
    • Characteristics
      • Relatively balanced industry allocation.
      • Bottom-up, selecting individual stocks.
      • Contrarian investing and left-side trading.
    • Funds
    • vs. Lei Ming
      • Lei Ming’s performance is more elastic and tends to do better in rising markets, while Lao Jienan is relatively more defensive in falling markets; over the medium and long term their performance was relatively similar.

11. GF Fund

  • Fu Youxing
    • Master’s degree in economics.
    • Characteristics
      • Top-down.
      • Contrarian thinking.
      • Balanced fund.
    • Funds
  • Liu Gesong
    • PhD in economics.
    • Characteristics
      • Evolution.
    • Funds

12. Harvest Fund

  • Gui Kai
    • Master’s degree in economics from Tsinghua University.
    • Characteristics
      • Value investing tilted toward growth.
      • Selects stocks from three dimensions: business model, competitive advantage, and industry trend.
    • Funds

13. China Asset Management

Most effort was focused on ETFs, and active funds had become much weaker.

  • Cai Xiangyang
    • Master’s degree in finance from China Agricultural University.
    • Characteristics
      • Bottom-up.
      • Large-cap value and large-cap growth.
      • Relatively low turnover.
      • Equity exposure maintained between 40%-60% for a long period.
      • Not favored.
    • Funds

14. HuaAn Fund

  • Yang Ming
    • Master’s degree from Central University of Finance and Economics.
    • Characteristics
      • Strict drawdown control.
      • Bottom-up.
      • Circle of competence
        • Mainly concentrated in large financials and cyclical industries.
    • Funds
  • Hu Yibin
    • Characteristics
      • Meso-level investor.
      • Growth stocks.
    • Funds

15. Yinhua Fund

  • Li Xiaoxing
    • Master’s degrees in engineering from the University of Cambridge and Imperial College London.
    • Characteristics
      • Prosperity-trend investing.
        1. Find industries whose prosperity is improving.
        2. Within those industries, find companies with fast earnings growth.
        3. From those companies, select names with reasonable valuations.
        4. Prefer names where the market has a different expectation about fundamentals.
      • High institutional ownership.
    • Funds

16. Zhonggeng Fund

  • Qiu Dongrong
    • MBA from Cheung Kong Graduate School of Business and bachelor’s degree in chemical engineering and technology from Tianjin University.
    • Characteristics
      • Value-strategy framework
        • First, asset allocation based on risk and risk premium.
        • Second, PB-ROE bottom-up stock selection, centered on uncertainty in ROE.
        • Third, a risk-management system.
      • The framework is relatively conservative, so long-term performance may not be especially outstanding.

17. Guotai Fund

  • Zhou Weifeng
    • Master’s degree.
    • Characteristics
      • Circle of competence
        • New-energy vehicles, pharmaceutical distribution, consumption, and traditional manufacturing.
      • Value investing.
      • Industry prosperity + bottom-up individual-stock selection.
      • Institutional ownership once reached as high as 96%.
      • Had changed employers.

18. Penghua Fund

  • Wang Zonghe
    • Master’s degree in finance from Renmin University of China.
    • Characteristics
      • Circle of competence
        • Prefers the food-and-beverage industry.
      • Bottom-up.
    • Funds

19. Huatai-PineBridge

  • Zhang Hui
    • Master’s degree in economics.
    • Characteristics
      • Growth stocks.
        • Quantitative tools.
      • Consumption.
      • A managed stock-selection system.
        • From a meso perspective, select industries with improving and persistent prosperity, then use bottom-up analysis to find strong companies with earnings momentum and continuously track and iterate on the targets.
      • Funds

20. Hongde Fund

  • Wu Chuanyan
    • Graduated from Tsinghua University.
    • Characteristics
      • A background in insurance asset management provides balanced stock and bond capabilities.
      • Long-distance runner.
      • Institutional ownership remained above 90% for a long period.
    • Funds

21. References

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