Market Performance - The Shanghai Composite Index has been rising since August, reaching a new high of 3683 points on August 13, surpassing the previous year's high of 3674 points [1] - The trading volume in the Shanghai, Shenzhen, and Beijing markets exceeded 2 trillion yuan [1] - A-shares and Hong Kong stocks are experiencing a multi-sector rotation upward, with public funds demonstrating strong active management capabilities [1] Fund Performance - Over 800 new funds were established this year, with more than 700 achieving positive returns, representing over 90% [1] - Notable active equity funds include the Invesco Great Wall Medical Industry Fund, which has returned over 60% since its inception on January 24, 2023 [3] - Other high-performing funds include the Yongying Rui Jian Fund with a return of 43.63% and several funds exceeding 30% returns [3][4] Fund Manager Insights - The performance of the newly established fund managed by Jia Chengdong at Shenwan Hongyuan Fund has been disappointing, with a decline of over 8% since its launch [1][6] - Concerns have been raised regarding the fund's frequent adjustments and high-risk strategies, which diverge from its advertised high-dividend focus [6] - Shenwan Hongyuan Fund has responded by urging investors to focus on long-term performance rather than short-term results [6] Market Outlook - Analysts from CITIC Securities suggest that while A-shares may face short-term resistance, the overall trend remains bullish, presenting opportunities for reallocation during pullbacks [2][6] - There is a recommendation to focus on new sectors and low-positioned niche products, particularly in defense, AI computing, semiconductors, and innovative pharmaceuticals [6][7] Sector Analysis - The innovative pharmaceutical sector is viewed as having sustainable growth potential, with fund managers expressing confidence in the industry's trajectory [7] - The technology sector, particularly cloud computing, is expected to experience adjustments, but remains a focus for long-term investment opportunities [7] - Emerging fields such as autonomous driving and robotics are anticipated to see significant growth, although current market conditions are uncertain [7]

Core Viewpoint - The pharmaceutical industry has shown remarkable performance in the first half of the year, driven by innovation and a shift in market dynamics, with a significant number of funds achieving over 20% returns, particularly in the pharmaceutical sector [2][3][5]. Group 1: Industry Performance - In the first half of the year, the pharmaceutical sector outperformed other sectors, with indices such as the Guozheng Hong Kong Stock Connect Innovative Drug Index and the Shanghai Stock Connect Innovative Drug Index both rising over 60% by June 30 [5][6]. - A total of 49 ordinary equity funds (excluding Class C) achieved returns exceeding 20%, with 22 of these being pharmaceutical funds, indicating a strong interest in this sector [2]. Group 2: Market Dynamics - The current pharmaceutical market is characterized by a transition from imitation to innovation, with domestic companies increasingly becoming leaders in the global market [6]. - The industry has seen a recovery in profitability, particularly among innovative drug companies, which have started to see returns on previous investments [6]. - After four years of decline, the overall valuation of the pharmaceutical sector is at a historically low level, contributing to a shift in investor sentiment from pessimism to cautious optimism [6]. Group 3: Future Outlook - The long-term investment logic in the pharmaceutical sector remains intact, driven by factors such as an aging population and the resolution of previous market concerns regarding centralized procurement [6][9]. - Despite the recent surge, there are still opportunities for investment as the market has not fully reflected the potential growth from upcoming product launches and commercialization [9][10]. - The pharmaceutical sector is expected to continue to attract attention, with both active and passive investment strategies being viable options for investors [11]. Group 4: Investment Strategies - Investors are advised to consider pharmaceutical funds, which can be categorized into active and passive funds, to mitigate the complexities and risks associated with direct stock investments [9][10]. - Active fund managers, like those at Invesco, focus on identifying high-potential companies within the sector, while passive funds, such as ETFs, offer lower entry barriers and diversified exposure [10]. - The Invesco Hong Kong Innovative Drug ETF has reported a return of 60.64% year-to-date, reflecting the strong performance of the sector [10].

Group 1 - The innovative drug sector has experienced a strong upward trend since May, attracting significant investor attention [1][2] - Despite the rising market, there is a notable divergence in the investment pace of newly established active equity funds, with some accelerating their investments while others remain cautious [2][3] - As of June 18, seven active equity funds were established in the eight trading days since June 9, with six showing net value fluctuations [2] Group 2 - The Ping An Hong Kong Stock Connect Medical Innovation Select Fund, initially set to close on June 25, ended its fundraising early on June 9, with a final scale of 249 million yuan [2] - The Dongfang Alpha Health Industry Fund also shortened its fundraising period from six to two trading days, ultimately raising 11 million yuan [2] - The performance of newly established funds varies, with the Invesco Great Wall Medical Industry Fund achieving a return of 27.01% as of June 17, leading among newly established funds [4][5] Group 3 - The fund manager of the Invesco Great Wall Medical Industry Fund indicated that the fund was established during a low point in the medical industry, but they remain optimistic about the sector [5][6] - The fund's portfolio had an 83.11% holding position by the end of Q1, with nearly 40% in Hong Kong stocks [5] - The manager anticipates 2025 to be a year of recovery for the industry, driven by reforms in commercial health insurance and the maturation of innovative drug companies [6] Group 4 - Despite the strong performance of the innovative drug sector, there are warnings about the inherent risks in drug development, including low success rates and high capital requirements [7] - The average success rate for drug development projects is only 10%, with a lengthy development cycle of around 10 years and costs reaching 1 billion yuan [7] - The ability of Chinese pharmaceutical companies to conduct clinical trials and commercialize products internationally still requires improvement [7]