As we approach the end of 2024, the landscape of asset management is witnessing significant changes with the release of quarterly reports from major international institutions such as BlackRock, Fidelity, and othersThese reports shed light on the portfolio holdings of their mutual funds, providing investors and analysts with insights into the strategies employed by these financial giantsWith BlackRock launching 14 new products, and Fidelity offering 8, the activity in the investment arena is both lively and indicative of broader economic sentiments.

In the realm of performance, some foreign mutual funds managed to capitalize on the market rebound observed at the end of last year's third quarter into the fourth quarter, achieving impressive returnsThis positivity continues as foreign asset managers exhibit strong optimism moving forward, focusing on sectors such as high-dividend stocks, technology, and consumer goods

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The optimism stands in stark contrast to the more cautious sentiments expressed in earlier parts of the year, highlighting a pivot in market dynamics.

The Allianz China Select fund, which debuted in the third quarter of 2024, has released its inaugural quarterly report revealing significant investments in companies like Juhua Materials and Qingdao BeerSurprisingly, the fund has recorded a total return of nearly 20% since its inception, which is quite remarkable for such a young fundFund manager Cheng Yu emphasized that the rapid accumulation of positions was completed shortly after the fund's inception, and the liquidity remained high towards year-endWith a focus on high-dividend and quality growth assets, the fund aimed to align with macroeconomic trends such as technological innovation and financial market development.

Meanwhile, the BlackRock China New Horizon fund also demonstrated its prowess with significant stakes in companies like China Galaxy and Suzhou Bank

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This fund has adopted a relatively aggressive stock positioning strategy, particularly emphasizing sectors such as electronics and power equipmentAdjustments were made in fourth-quarter allocations, signaling a dynamic approach to portfolio management, especially with the pullback in traditional sectors like banking and materials in favor of domestic-driven demand.

Fidelity’s 6-Month Inheritance fund marked an impressive annual performance, with a 15.65% return, showcasing successful positioning in technology and innovation-driven enterprisesThe fund managers maintained high equity holdings throughout the reporting period, making tactical moves to increase exposure to industrial innovation and sectors with solid valuations, particularly in pharmaceuticals and consumer goods.

Additionally, Schroders China Dynamic fund revealed major holdings in leading companies, effectively capturing the uptrend in the market during late third quarter

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Fund manager An Yun noted that a balanced allocation strategy was established in response to market volatility while anticipating potential growth triggers from technological advancements.

Looking forward to 2025, managers such as Cheng Yu and An Yun express optimism regarding the A-share market, which is expected to continue its upward trend backed by robust corporate earnings and supportive policiesHowever, they caution about impending fluctuations, especially as uncertainties loom over geopolitical risks and domestic economic targets set for the forthcoming National People's CongressThe initial phase of 2025 could witness significant market volatility.

From a strategic allocation angle, Cheng emphasizes that A-shares currently appear more attractive than renminbi bonds, warranting an overweight position on equitiesThe focus remains on high-dividend assets alongside quality growth stocks, with a keen eye on sectors expected to outperform due to strong profitability projections.

In terms of industry outlook, bank stocks, telecommunications, and resource sectors are seen as beneficiaries of high dividends

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Conversely, growth potentials are recognized in technology, machinery, consumer engagement, and defense industriesThis distribution of investments indicates a well-rounded strategy anticipating multifaceted economic stimulation.

For the upcoming year, An Yun is similarly enthused about the potential for economic performance, particularly with technology and consumer sectors heralding a recovery momentumNonetheless, he remains aware of the shadows of deflation and tariffs which could complicate predictive analyses of the stock marketThe nuances of systematic investment review and demand stimulation might become crucial in navigating through these macroeconomic challenges.

The economic narrative of China suggests that the nation is at a pivotal point in transitioning from a middle-income to high-income statusA sustained focus on technology-driven enhancements in productivity can facilitate labor income growth, which is essential for societal advancement.

With supportive policies fostering stabilization in the housing market, the rebound seen in real estate sales offers critical support for the overall economy, especially in light of sectoral adjustments over the past three years

Recognizing real estate as a cornerstone of economic viability, the interplay of recovery and strategic shifts becomes paramount.

However, the presence of long-standing concerns regarding deflation and tariffs casts a shadow on the trajectory of the export-oriented manufacturing sector, which may face challenges in the coming yearAcknowledging the pivotal role of private enterprises in employment creation, bolstering domestic demand is acknowledged as a viable solution to counterbalance external pressures.

Lastly, the outlook for China's stock market remains cautiously optimisticFollowing the implementation of strategic policies, the A-share market has started to display characteristics reminiscent of shareholder value enhancement, paving the way for potentially fruitful investment dynamics moving into the new yearAs financial institutions continue to adapt to the evolving landscape, their roles in driving market sentiment will undoubtedly remain crucial.