"Pro Cycle" + "Carbon Neutral": Iron And Steel Fund Takes The Monthly Champion

Iron and steel theme fund is counterattack.

As of March 18, 2021, the top three fund net value increases in the past month are steel theme funds. Penghua Guozheng steel, Zhongrong Guozheng steel and Cathay Pacific Zhongzheng steel have increased by 19.60%, 19.19% and 18.31% respectively in the past month.

At the same time, more than 70% of the funds in the market are still in deficit.

Not only that, the steel plate also collectively "steel", on March 18, Fangda special steel trading limit, TISCO stainless steel rose by 7.07%, Yongxing materials rose by 5.04%, and Baosteel, Xining Special Steel, Jiuli special materials and other stocks rose collectively, demonstrating a red sea. The steel index also rose 11.06% in the past month.

This means that the traditional sunset industry of steel industry is coming?

Monthly revenue champion

On the one hand, the new development fund is facing cold, while on the other is the scale growth of steel fund.

Since March, many fund companies have extended the deadline for raising new funds. Due to the unsatisfactory sales situation, some fund raising periods have been extended for more than two months.

However, the scale of Cathay Pacific China Securities steel ETF has doubled in the near future.

During the period from February 18 to March 17, Cathay Pacific China Securities steel ETF obtained a net purchase of 313 million yuan, with the scale increasing from 219 million yuan to 532 million yuan.

As the best target to grasp the structural market and obtain the development dividend of the industry, the industry ETF has received strong attention from the market.

Wind data show that the largest ETF growth year to date is Cathay Pacific China Securities steel ETF, up 21.66%.

Cathay Pacific China Securities steel ETF is managed by Cathay Pacific Fund. In the fourth quarter of 2020, the top ten stocks disclosed are Baosteel Co., Ltd., Baotou Steel Co., Ltd., CITIC Special Steel Co., Ltd., Shagang Co., Ltd., Hegang Resources Co., Ltd., Nanjing Iron and Steel Co., Ltd., Hegang Co., Ltd., Hualing iron and Steel Co., Ltd., Xinxing Cast Pipe Co., Ltd. and Chongqing Iron and Steel Co., Ltd.

Penghua Guozheng steel, Zhongrong Guozheng iron and steel, and Cathay Pacific Zhongzheng iron and steel not only ranked the top three funds in monthly income, but also reached 52.28%, 45.19% and 44.37% respectively in one year's income.

At the same time, in the last month, more than 5000 of the 7000 funds on the market lost money, and the net value of new funds managed by many star fund managers fell below 1 yuan.

Frequent research by institutions

Many steel stocks are favored by fund managers.

According to the information disclosed by CITIC special steel, on March 2, there were about 60 research companies including China Europe Fund, Dacheng Fund, Ruiyuan fund, ICBC Credit Suisse and e fund.

Subsequently, Boshi fund and others participated in the investigation of Minguang Group Co., Ltd., and the survey summary disclosed by Boshi fund shows that Luoyuan Mingguang is carrying out transformation and upgrading project construction, and H-beam production line equipment has been installed. It is expected that foreign experts can arrive in China in the first ten days of March, and can enter the site for debugging at the end of the month.

Ruiyuan fund, China Europe Fund and Doctoral Fund also participated in the research of Valin steel.

According to the survey summary disclosed by Valin steel, the company's performance has increased significantly in recent years, mainly due to the remarkable effect of the company's variety structure adjustment. The proportion of varieties of steel with "high added value, high technology content, high profitability and meeting the personalized needs of customers' terminals" has gradually increased, reaching 50% by the end of 2020, and has actively transformed into high-quality steel and special steel, including wide heavy plate, hot-rolled plate and automobile Plate and other products have established differentiated competitive advantages in the subdivision field. Lianyuan Steel's heat treatment capacity of thin plate ranks first in Asia. A series of products of the company have been replaced by imports, which fills the domestic gap.

In addition, Wells Fargo fund, China Southern Fund, ABC Huili and other fund companies also participated in the research activities of Valin steel.

Over the same period, steel stocks rose strongly. Valin steel, Baotou Steel shares and other strong stocks rose more than 50%.

"Pro cycle" + "carbon neutralization" power

Analysts pointed out that the trend of steel fund continued the trend of continuous strength of Pro cyclical plate since 2020. At the same time, under the layout of carbon neutral strategy, the steel plate may face a new round of supply side structural reform, and the current funds try to avoid the hot direction of institutional clustering. Therefore, steel stocks have become the focus of fund managers.

Ao Zhen's team, chief cycle industry analyst at CITIC Securities, believes that 2021 may be a big year for the steel industry. With its supply and demand pattern becoming better, investment opportunities are no less than 2017.

Industrial securities analysis pointed out that the carbon peak, carbon neutral policy may have a profound impact on the steel industry, and the steel industry may face a new round of "supply side structural reform". On the one hand, it will accelerate the steel industry to improve production processes, update equipment and use low-carbon energy; on the other hand, it will promote steel enterprises to actively innovate and develop deep decarbonization technology. In the wave of low-carbon transformation, small and medium-sized enterprises with high energy consumption and low efficiency will be eliminated. Through low-carbon innovation, the market competitiveness of large-scale enterprises will be further enhanced. In the future, green enterprises can also make profits by selling carbon emission trading, so the leading enterprises with more advantages in environmental protection and scale may benefit further.

Fund managers said they were optimistic about the opportunities brought about by the new round of supply side structural reform in the steel industry.

Liang Xing, director of quantitative investment division of Cathay Pacific Fund, believes that steel is the preferred industry to achieve carbon peak and carbon neutralization. The new round of supply side reform in the iron and steel industry is expected to lead to a rise in the price of finished steel, and there is still a large room for profit to climb in the case of output reduction. It is expected that the adjustment will last for 2-3 years. The steel industry has ushered in a time point of industrial transformation. The past industrial logic has been reconstructed, and the undervalued value may be improved. At present, it may be a better time point for configuration; carbon peaking and carbon neutralization may be the themes throughout this year.

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