Core Viewpoint - The pharmaceutical sector, particularly innovative drugs, has shown strong performance in fund net value growth this year, indicating a promising future for the industry and related funds [1][2]. Fund Performance - As of June 13, 2023, 22 pharmaceutical funds have achieved a net value growth rate exceeding 50%, with themes including innovative drugs, pharmaceutical industry, and healthcare leading the rankings [2]. - In the QDII fund category, 5 pharmaceutical products also surpassed a 50% growth rate, with 3 innovative drug funds ranking among the top seven [2]. - The Hong Kong innovative drug 50 ETF has seen a significant increase in shares, growing nearly 40 million shares this year, with a share change rate of nearly 300% [2]. Market Trends - The Hong Kong innovative drug index has outperformed other industry indices, with a year-to-date increase of approximately 74%, leading among 233 industry indices [2]. - Other related indices, such as the Hang Seng Hong Kong Stock Connect Innovative Drug and Healthcare indices, have also maintained growth rates around 70% [2]. Future Outlook - Fund managers express optimism about the future of the innovative drug sector, citing factors such as low per capita medical spending and an aging population driving demand [3][4]. - The innovative drug industry is expected to enter a new valuation reassessment cycle, supported by favorable policies and advancements in AI technology [3][4]. - The market is anticipated to witness a significant transformation, with Chinese pharmaceutical companies improving their overseas production and quality, leading to a potential "turning point" in profitability [4].

Core Viewpoint - The shift in market financing from A-share ETFs to Hong Kong ETFs highlights a significant investment opportunity in the Hong Kong innovative drug sector, driven by strong performance and increasing interest from smart capital [2][6]. Group 1: Market Trends - The Hong Kong innovative drug ETF has become the leading choice for financing buy-ins, significantly outpacing A-share ETFs in terms of financing amounts [2]. - The Hang Seng Healthcare Index has seen a remarkable increase of over 57% this year, indicating a robust market for healthcare ETFs [4]. - The trend of financing net buy-ins moving from A-share ETFs to Hong Kong ETFs reflects a growing confidence in the Hong Kong innovative drug sector, which has experienced a long period of decline followed by a recent rebound [6]. Group 2: Performance Metrics - Multiple public funds have reported annual returns exceeding 50% to 60% for their healthcare and innovative drug ETFs [4]. - The Guangfa CSI Hong Kong Innovative Drug ETF, managed by Liu Jie, has achieved a year-to-date return of 62%, outperforming the Hang Seng Healthcare Index [4][8]. - Notably, the ETF's top holdings, such as China National Pharmaceutical Group and Zai Lab, have experienced significant price increases, contributing to the fund's strong performance [5]. Group 3: Investment Strategies - Prominent fund managers are increasingly opting for public ETFs over actively managed funds to gain exposure to the innovative drug sector, reflecting the challenges of stock selection in a rapidly evolving market [7]. - The entry of smart capital into the Hong Kong innovative drug ETF market is exemplified by the participation of well-known fund managers, such as Zhang Xiaoren, who has achieved a 34% return in just three months [8]. - The integration of AI technology in drug development and the increasing global competitiveness of Chinese pharmaceutical companies are expected to drive future growth in the innovative drug sector [10][11].