Group 1 - The innovative drug sector has seen a significant recovery this year, becoming a popular investment area in the secondary market, with public funds reporting a peak in pharmaceutical-themed fund applications in the second quarter, totaling around 30 products, comparable to the total number for the entire year of 2024 [1][2] - Public funds heavily invested in innovative drug stocks have achieved returns exceeding 80% this year, leading to substantial inflows into related thematic index funds, such as the Huatai-PineBridge ETF, which saw net inflows of over 4.4 billion yuan, increasing its scale from 653 million yuan to 6.489 billion yuan [2] - The investment sentiment in the innovative drug sector is rising, with many institutional investors showing strong interest, and the approval speed for pharmaceutical-themed funds is accelerating to meet market demand [4][5] Group 2 - The innovative drug sector's valuation is under discussion, with some experts suggesting that while the current valuation is not low, it has not yet reached a bubble stage, indicating potential for further increases as more drug pipelines advance to late-stage clinical trials [4][5][6] - The investment opportunities in the innovative drug sector are seen as a result of ten years of research and development, with expectations for significant business development contributions and improved financial reports in the coming years [7] - Different fund companies are adopting varied strategies for product layout, with a focus on active management products in the innovative drug sector, which may offer better opportunities for excess returns compared to passive products [8]

Core Viewpoint - The innovative pharmaceutical sector has shown significant recovery this year, becoming a popular investment area, with a peak in the number of new pharmaceutical-themed funds being reported in the second quarter of 2023 [1][2]. Fund Reporting Peak - Approximately 30 pharmaceutical-themed funds were reported in the second quarter of 2023, matching the total number of such funds expected to be established in 2024 [2]. - Fund companies are focusing on both index products and actively managed products, with several new ETFs and mixed funds being launched [2][3]. Investment Sentiment and Valuation - The investment sentiment in the innovative pharmaceutical sector is increasing, with many institutional investors showing strong interest [3]. - There are discussions regarding the valuation of the innovative pharmaceutical sector, with some experts suggesting that while current valuations are not low, they have not yet reached a bubble stage [4]. Market Dynamics and Future Outlook - The demand for pharmaceuticals is expected to rise due to an aging population, and the international standing of Chinese innovative pharmaceutical companies is improving [3]. - The innovative pharmaceutical sector is seen as a long-term investment opportunity, with expectations of increased business development and improved financial performance in the coming years [4]. Investment Strategy - Different fund companies are adopting varied strategies for participating in this investment opportunity, with a focus on active management potentially yielding higher returns in specialized sectors like innovative pharmaceuticals [5]. - The choice between passive and active products depends on the specific investment goals and the capabilities of fund managers [5].