Kan Gu: Pay attention to new trends in incremental funds after the long holiday

The Spring Festival holiday has ended, and the A-share market is about to迎来 the first trading day of the Year of the Horse. During long holidays, some conservative funds tend to exit before the holiday to avoid uncertain risks, and after the holiday, these funds often re-enter as incremental capital. The sectors and individual stocks they target are usually both safe and growth-oriented, so investors should pay close attention to related investment opportunities.

The outflows and inflows of funds before and after the holiday essentially reflect a dynamic adjustment of risk premiums. Funds exiting before the holiday generally have lower risk appetite, primarily aiming to avoid potential sudden negative news during the holiday period. When funds return after the holiday, they will choose safer and more reliable investment directions based on macroeconomic information and changes in industry fundamentals during the holiday.

In the current market environment, the sources of incremental funds mainly include two parts. One is the funds that were cashed out before the holiday and are now flowing back, and the other is new funds entering the market after the holiday. Based on historical experience, public funds are likely to buy more stocks after the holiday. The flow of these new funds at the start of the Year of the Horse will directly determine the short-term market style preference. This gathering of funds is not impulsive but based on a comprehensive assessment of macroeconomic and industry information changes.

The logic behind the deployment of incremental funds after the holiday generally follows the principle of prioritizing safety and then growth. Therefore, these funds will pay more attention to traditional blue-chip stocks and white horse growth stocks that have already announced their annual reports.

Stocks that attract funds typically have the following characteristics. First, their valuation levels are within a reasonable range. During the return, risk-averse funds will prioritize sectors with strong defensive attributes and high earnings growth certainty. These assets can provide more safety during market volatility and align with the investment strategies of institutional investors seeking稳健布局 after the holiday.

Second, the industry must have high prosperity. Simply low valuation is not enough to drive continuous stock price increases. Incremental funds tend to seek growth sectors that represent the future direction of economic transformation, such as policy-guided domestic consumption and technology manufacturing with breakthrough potential. These sectors often benefit from policy dividends and industry development support after the holiday, becoming new targets for capital.

Historical experience shows that the market has a higher probability of rising in the first week after the Spring Festival, reflecting investors’ generally optimistic outlook for the new year’s economic development. However, if global market volatility intensifies or commodity prices fluctuate significantly, the A-share market is unlikely to see a broad rally. Instead, it will more likely show a structural upward trend, with sector rotations continuing for a considerable period.

It is important to note that incremental funds do not distribute their investments evenly across all stocks. Under sufficient liquidity, it is more important for investors to focus on sectors with large capital participation than on fluctuations of the overall index. Institutional investors tend to prefer industry leaders when selecting stocks. For ordinary investors, pre-judging the logic behind large capital stock selection can help buy high-quality growth stocks at lower costs.

Of course, the return of incremental funds also carries uncertainties. If the speed and scale of fund inflows do not meet expectations, investors should remain cautious, possibly slowing down their investment pace and patiently waiting for better opportunities.

Beijing Business Daily Commentator Zhou Kejing