Qifu Technology (QFIN) is a Credit-Tech platform in China that provides a comprehensive suite of technology services to assist financial institutions, consumers, and small to midsize enterprises throughout the loan lifecycle. Like many other Chinese companies, QFIN has benefited from significant capital inflows over the past several months as its shares recovered from a multi-year slump. Currently, QFIN is in the Favored Zone of the SIA International ADR Report and has recently been added to the SIA Hypothetical International 5-ADR Model. Vista Oil and Gas (VIST) was also a holding in the 5-ADR Model until it moved out of the Favored Zone, triggering a sell signal. As a result, our rules-based system necessitated the removal of VIST in favor of another top relative strength performer, which happened to be QFIN. On September 27th, we sold 57,620 shares of VIST at $46.25 for a modest profit after a 5-month hold and added QFIN to the model, notifying SIA practitioners to update this sleeve of their portfolios. With an SMAX score of 10 out of 10, QFIN demonstrates strong short-term performance across various asset classes, showing excellent relative strength compared to both its peer group and other investment classes within the SIA International ADR universe.
To provide context for this holding, we refer to the SIA Hypothetical International 5-ADR Model, a concentrated strategy that maintains only top relative strength names from the SIA International ADR Report. This strategy has proven highly effective, with the model up 1,792% since its inception in 2012 (including 10 years of live trades and back-tested beyond, gross of fees). Compared to the benchmark return of 118% from the iShares ex-US World Index (ACWI), the concentrated model represents substantial outperformance. With holdings across Automotive, Aerospace, Computer Hardware, and Leisure, the performance has been remarkable, featuring names like Rolls Royce (RYCEY) up 310%, Embraer (ERJ) up 30%, and recent addition GDS Holdings (GDS) already up 21%. The Compound Annual Growth Rate (CAGR) for the SIA Hypothetical International 5-ADR Model is now at 25.91%, compared to ACWIâs 6.31%, with a 5-year figure of 58.93% versus 7.27%. If you havenât yet explored what SIA has developed with our 5-stock concentrated models, we encourage you to reach out and let one of our SIA agents guide you through a quick demo, showcasing how these proven modelsâbacked by over 10 years of consistently outperforming the marketâcan offer a reliable and effortless way to streamline your book and optimize your strategies.
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