Core Insights - In 2021, public funds achieved a total profit of 717.89 billion yuan, with bond funds being the most profitable category, generating 228.72 billion yuan, accounting for over 30% of total profits [1][3]. Fund Manager Strategies - Fund managers significantly increased their holdings in pharmaceutical and new energy stocks while reducing positions in high-performing resource stocks and some underperforming value stocks [1][2]. - The focus of public funds in 2021 was diversified, with attention on sectors like consumption and pharmaceuticals, indicating a strategic shift towards growth areas [2]. Market Outlook - Fund managers maintain an optimistic view on the A-share market, citing that overall market valuations are at historical lows, although they anticipate continued structural differentiation in the market [1][2]. Individual Investor Trends - The proportion of individual investors holding public funds has been rising, with top-performing fund managers' products attracting significant attention and investment from retail investors [3]. Management Fee Revenue - Public funds generated a total management fee income of 141.64 billion yuan in 2021, surpassing 100 billion yuan for the first time, with notable growth in management fees across various fund types [3]. - The management fee income for stock, mixed, bond, and money market funds saw significant increases, with stock funds experiencing a 57% rise [3]. Costs and Expenses - Public funds incurred substantial costs related to sales channels, with customer maintenance fees reaching 40.86 billion yuan, an increase of 16.57 billion yuan from the previous year [4].

Core Viewpoint - The public fund significantly reduced its holdings in XCMG Machinery, indicating a potential shift in market sentiment towards the engineering machinery sector due to cyclical adjustments and underwhelming downstream demand [1][2]. Group 1: Fund Holdings and Performance - XCMG Machinery's number of public fund holders decreased from 246 to 123, with a reduction of 3.88 billion shares, making it the most heavily reduced stock in the second quarter [1]. - Major reductions were noted in multiple products under China Europe Fund, with six funds previously holding 122 million shares of XCMG Machinery, which have now exited the top ten holdings [1]. - Despite the reduction, XCMG Machinery's stock price showed resilience, closing at 9.15 yuan per share on July 22, 2023, after a 4.69% increase, approaching its historical high [2]. Group 2: Industry Context and Analysis - The engineering machinery industry is experiencing a cyclical adjustment, compounded by lower-than-expected construction and real estate activity, leading to diminished short-term growth confidence [2]. - Increased competition and rising cost pressures are prompting funds to shift towards sectors with more predictable returns, such as banking, technology, and pharmaceuticals [2]. - Notably, while many funds reduced their holdings, E Fund increased its positions in XCMG Machinery, with approximately 10.86 million shares and 10.14 million shares added in two of its products [3].