Investment Strategy

The fund strives to obtain relatively stable return mainly through IPOs arbitrage. It limits stock position in secondary market to lower than 20%. Meanwhile, the fund invests in treasury, financial bond and repo to manage idle capital.

1. IPOs arbitrage Strategy

The fund, with the fund manager’s research platform and stock valuation system, makes thorough and comprehensive estimation of list companies’ fundamentals, which helps to explore IPO shares’ intrinsic value. The fund looks comprehensively into the market valuation level, the stock market investment environment, the success rate of recent IPOs, lock-up period of IPOs to effectively spot and guard against the risk, select IPO companies with high investment value, and sell them in 20 trading days after the listing day. The fund will obtain stable return through premium between the secondary price and the issue price.

2. Secondary stock investment strategy

Starting from the fundamental analysis and based on the sufficient evaluation of the intrinsic value of the listed companies, the fund selects those listed companies with high investment value by comprehensively evaluate their core competence, profitability, profit quality, cooperation governance, valuation level, etc.

3. Fixed income investment strategy

The fund invests bonds and money market tools, such as treasuries, financial bonds, repo etc., to manage the idle capital.

4. Futures investment strategy

The fund is allowed to participate in index futures. According to the risk management policies, the fund will invest in those most liquid and active futures contracts. The main strategy includes partly hedge the market risk of stock position, hedge the liquidity risk in extreme market conditions, alpha arbitrage, basis arbitrage and intertemporal arbitrage.

Benchmark

1-year-term deposit rate (after tax)+3%

Risk-Return profile

This fund is an active hybrid fund with higher expected risk and higher expected return than bond fund and money market fund, lower expected risk and lower expected return than equity fund.