The 31 primary industries in the Shenwan classification can be divided into six major style sectors, namely cyclical, advanced manufacturing, technology (TMT), consumer, pharmaceutical and medical and financial real estate.
The establishment of major style sectors follows two principles:
1, homogeneity: companies within the same style sector from business or financial aspects need to have a certain degree of homogeneity or comparability in the use of valuation methods with valuation clustering characteristics.
2, practicality.
If the market capitalization of a certain style of plate accounted for a very small percentage, then although this plate has a certain degree of representativeness, but because of its share is too small, in the practical use of the significance of the establishment, and not, and vice versa.
The introduction of broad style sectors and supporting indexes has strong practical significance in both qualitative and quantitative analyses:
1. Behind the changes in the structure of broad style sectors is a microcosm of China's economic changes.
Static perspective, as of September 9, 2022, there are 4,799 listed companies in Shanghai and Shenzhen A-shares***, with a total market capitalization of up to 106 trillion, and a free-float market capitalization of up to 37.2 trillion. The free-floating market capitalization of these six major style sectors are as follows: Cycle (24.1%) > Advanced Manufacturing (22.7%) > Technology (TMT) (16.0%) > Finance & Real Estate (14.5%) > Consumption (14.4%) > Pharmaceutical & Healthcare (8.3%).
Dynamic perspective, behind the rise and fall of style sectors is also a thumbnail sketch of the development of China's economy and capital market. around 2006, cyclical and financial real estate sectors accounted for as much as 60% of the free-float market capitalization combined. And after 2007, once the financial real estate and cyclical plate free circulation market capitalization pivot with China's economic transformation, real estate control and other factors began to gradually downward, replaced by advanced manufacturing, science and technology (TMT), consumer, pharmaceuticals and health care accounted for an increasing proportion.
The advanced manufacturing and technology (TMT) sector in the last 10 years, the free float market capitalization share increased by 8.4 and 6.3 percentage points, respectively, is the largest two sectors of all broad style sectors to improve.
2. It can assist in observing the structure of capital market institutions' positions and capital preferences.
In terms of market performance, Consumer and Pharmaceuticals & Healthcare have performed better over the long term, with annualized returns and Sharpe ratios the two highest among all broad style sectors. Advanced Manufacturing has been second only to Consumer and Healthcare in terms of annualized return, driven by the new energy industry, which has risen sharply in the last 2 years. The technology (TMT) sector is the most volatile of all sectors, reflecting the aggressive, risky and resilient nature of technology stock investments.
From the point of view of the public position, 22Q2 active equity public equity fund positions from large to small are: advanced manufacturing (29.3%) & gt; consumer (23.3%) & gt; cycle (16.3%) & gt; science and technology (TMT) (14.0%) & gt; pharmaceuticals and health care (10.8%) & gt; financial real estate (6.4%).
The public equity funds are overweight in advanced manufacturing, consumption, technology (TMT) and pharmaceuticals and medical sectors, and underweight in cyclical and financial real estate sectors. Public equity for the cycle of the configuration of the pivot continues to move down, in 2005 after the over-allocation has continued to enter the under-allocation state; advanced manufacturing in 2020 by the new energy driven by the public equity funds fully recognized, the current share of positions and configuration coefficients are at a historically high level; and financial real estate, pharmaceuticals and medical care is basically in the history of the lowest level of configuration.
Consumption in 2015-2019 configuration continues to rise, although in 2019 after the style switch downward, but still in the state of overweight, reflecting the public equity for the consumer sector "favorites"; science and technology in 2015, "leveraged cattle "After 2015, the configuration pivot began to gradually decline in 2019 with the rise of the semiconductor market and upward, currently close to the market balanced allocation level.
3, can be widely used as a benchmark for fund comparison, analysis and can provide additional quantitative analysis and strategy construction tools.
Shenwan Sector Profile:
Shenwan Sector refers to the sectoral division of Shenyin Wanguo, the name of a securities company formed on July 16, 1996 by the merger of the former Shanghai Shenyin Securities Company and the former Shanghai Wanguo Securities Company. Shenwan industry from the point of view of investment, practical research, the industry is divided into 28 primary industries, 104 secondary industries, tertiary industries 227.
Shenwan primary industries are: non-banking financial, household appliances, construction and decoration, chemical industry, automobile, agriculture, forestry, animal husbandry and fishery, media, public utilities, construction materials, machinery and equipment, textile and clothing, real estate, electronics, computers, extractive, Light Manufacturing, Steel, Transportation, Defense Industry, Electrical Equipment, Leisure Services, Communications, Pharmaceuticals and Biotechnology, Banking, Non-ferrous Metals, General, Business Trade, Food and Beverage.