Market Regime Shifts Drastically; Funds Chasing High-Tech Suffer

Since the start of the year, the A-share market has exhibited extreme structural divergence. The technology sector surged in the first half but halted momentum abruptly in the third quarter. Amidst this sharp style rotation, some active equity fund managers who missed out on tech stocks earlier felt pressured by relative rankings and followed the trend at historical highs, only to suffer losses when the market reversed. Conversely, previously overlooked dividend sectors led the charge in the second half of the year; thus, funds sticking to healthcare, dividends, or high-dividend strategies achieved positive returns for most within the year despite missing the earlier windfall. Analysts point out that fund managers must recognize that no investment style can adapt to all market conditions forever, urging them to respect valuations and adhere to the investment principle that 'gains and losses stem from the same source.' (Securities Times)