With only 2 trading days until the end of 2023, the Shanghai and Shenzhen 300 Index has been falling for 3 consecutive years, falling more than 36% since 2021. The Shanghai Stock Exchange launched a defensive battle of 3,000 points and 2,900 points one after another this month.

Standing in the present moment, confidence is more precious than gold.

! 1

91.7 billion! Funds bucked the trend and bottomed out ETF

As of December 26, the number of liquidated funds since 2023 has reached 256, a record high since 2019.

Since this year, the number of equity fund liquidations has reached 61, the highest in the public fund industry since 1998; the number of FOF fund liquidations has broken through double digits, reaching 12, a sharp increase of three times that of 2022. Of these, 7 are pension FOF products.

On the one hand, the number of fund liquidations reached a new high, and on the other hand, the ETF market was favored by capital.

On the evening of December 26, the China Fund Industry Association released the latest public fund market data. By the end of November this year, the latest total size of domestic public funds reached 27.45 trillion yuan, an increase of 71,175 billion yuan over October, ending the previous three-month decline. The total share of public funds reached 26.20 trillion, and the number of funds was 11,400.

The increase in the size of public funds in November was mainly due to bond funds and QDII funds. The monthly size of the two types of funds increased by 203.8 billion yuan and 20.4 billion yuan respectively. In addition, equity funds also gained net subscriptions due to stock ETFs bucking the trend, and achieved scale growth.

This year is a big year for ETF development, and the size of the global ETF market reached a new high in 2023.

According to Huafu Securities statistics, the scale of global ETF products has been growing steadily over the past 20 years. By the end of November 2023, the global ETF market had reached 10.7 trillion US dollars, an increase of 7.6% over the end of last year, once again reaching a record high.

In terms of regional distribution, the US is the most important ETF market in the world, accounting for about 70% of the share. Other major markets include Europe (15.2%) and Japan (4.7%). Looking at capital flows, as of the end of November this year, the cumulative net capital inflow for global ETF products was 803.1 billion US dollars, a slight increase of 2.1% over the previous year. The net inflow scale is also at a high level in history.

Notably, A-share investors have continued to buy ETFs since December.

As of December 26, the total management scale of 826 stock ETFs in the entire market was 1.65 trillion yuan. Since December, the net inflow of capital through stock ETFs has been about 91.7 billion yuan. The Shanghai Stock Exchange 50 and the Shanghai and Shenzhen 300 indices are the main directions of capital inflows.

A-shares have been adjusted for three years, and US stocks, which have been strong in the past 10 years, have also experienced the darkest hour.

Due to the 2008 financial crisis, global stock markets plummeted. The US stock S&P 500 began to adjust from a high in October 2007 and fell until March 2009. The biggest decline during this period was over 55%, while the biggest decline in the NASDAQ index even exceeded 70%.

The market was already in a state of extreme panic at the time, and Berkshire's market capitalization had shrunk by 11.5 billion US dollars. In the midst of panic, on October 16, 2008, Buffett personally published the article “Buy American” in the New York Times. I AM.》 , making the most determined voice, Buffett wrote:

“I want to make one thing clear. I can't predict short-term changes in the stock market, and I'm afraid to speak falsely about the rise and fall of stocks within 1 month or 1 year. However, it is likely that there will be a situation where the stock market will rise and possibly rise sharply until the market regains confidence or the economy recovers. So if you wait until the robin calls, you'll miss the whole spring.”

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2

Does the US stock still have 5.88 trillion US dollars in OTC capital?

The S&P 500 index has been rising for 8 consecutive weeks, but the VIX Index (Panic Index) is on the rise, and mysterious funds are betting heavily on this position.

After bears were eliminated in the midst of a continued strong rise, the market began to divide, and mysterious funds are betting on a major rebound in the VIX index. Recently, there was a large-scale options transaction. A trader placed a huge bet, betting that the VIX Index would return from the current 13 to 17 on January 17.

Recently, Michael J. Kramer, founder of the well-known investment agency Mott Capital Management, wrote that the above trends may mean that the recent major rebound phase of the US stock market and the benchmark stock index P500 Index is nearing or temporarily over. The S&P 500 index may even pull back to the starting level where it began to rebound at the end of October, and the rebound may subside.

However, some institutions said that US stocks will still have huge amounts of OTC capital next year.

Mark Newton, technical strategist at Fundstrat, said in the report that growing cash reserves in US money market funds should be a strong support for the stock market in 2024.

Mark Newton believes that the 5% risk-free interest rate has led to a surge in money market fund assets this year, and the total amount of OTC cash reached a record 5.88 trillion US dollars, an increase of 24% over last year. “If the Federal Reserve starts cutting interest rates next year, the risk-free interest rate for money market funds will also fall, which will push more capital to the stock market.”

The strategist believes that given the global liquidity background and large amounts of OTC cash, a slight pullback in the next few weeks or months should be viewed as a buying opportunity. He said that once the fund starts allocating cash next year, this will further drive the market rebound.

Mark Newton emphasized that growing cash reserves suggest that despite the index reaching new highs, investors' optimism about the stock market is not as bubbly as it seems.

3

After a lapse of over a year, Sister Mu Tou is once again targeting Japanese stocks.

American stock influencer fund manager Sister Mu Tou has been making frequent moves recently.

According to the data, Mu Toujie's ARKF ETF has risen close to 94% this year, while the Nasdaq 100 index has risen more than 53% so far this year.

(The content of this article is a list of objective data and information and does not constitute any investment advice)

On December 26, local time, according to a Bloomberg report, the ARK Fintech Innovation ETF (ARKF) fund managed by Cathy Wood, known as the “Buffett Woman on Wall Street,” bought shares of Japanese tech giant LY last week. This is the first time in over a year. Prior to that, for the first 4 quarters of September, Mu Toujie's ETF fund had been reducing its holdings of LY Company.

LY is the operator of the communication software LINE and “Yahoo Japan,” and most of the company's shares are held in a joint venture between SoftBank and Korea's Naver. LINE is a well-known mobile messaging program in Japan, known as the “Japanese version of WeChat”; Yahoo Japan (Yahoo! JAPAN) is one of Japan's major search engines.

Since April of this year, Buffett's Berkshire Hathaway has vastly increased its stock holdings in Japan's five largest trading companies, boosting the momentum for foreign investors to buy Japanese stocks.

According to statistics from the Tokyo Stock Exchange, as of November, overseas investors were net sellers of Japanese stocks for only three months this year; the other eight months all showed capital inflows.

The inflow of foreign capital caused Japanese equity-related indices to both hit 33-year highs during the year, and the two major Japanese benchmark stock indexes both rose by more than 20% during the year. In the A-share market, tracking Japanese equity-related indices also achieved good gains this year.