Peter Lynch once remarked that discovering a great company is far more challenging than finding a great car, yet the rewards are substantially greater. During his thirteen-year tenure managing the Magellan Fund, his central strategy involved uncovering growth companies whose earnings growth significantly outpaced the market average.
Philip Fisher expressed a similar principle, suggesting that the enterprises truly worthy of long-term investment are often those capable of continuously generating new demand and expanding their operational frontiers.
What both were fundamentally seeking is the same thing: the "expectation gap." To illustrate, if the market anticipates a company will earn 1 billion next year, but it actually earns 1.5 billion, that extra 500 million represents the expectation gap. Whoever identifies this gap first secures a priority pass to potential wealth.
The SZSE Growth 100 Index is essentially the product of systematizing this "search for the expectation gap." In its evaluation framework, historical performance accounts for only 25% of the weighting. The remaining 75% is entirely focused on the future. In the short term, it monitors changes in consensus net profit forecasts to capture inflection points in performance. For the long term, it tracks the compound annual growth rate of net profit over the next two years and changes in expected return on equity for the following year, thereby assessing the quality of growth.
The core philosophy of this approach can be summarized in one sentence: it does not select the best performers of the past, but rather those with the most promising future outlook.
How "growth-oriented" is this index? The data provides the answer. From 2019 to July 3rd of this year, the SZSE Growth 100 Index has achieved an annualized return of 34.0%. Its year-to-date gain for the current year stands at 54.1%. More notably, the average net profit growth rate for the index's constituent stocks from 2019 to 2025 is as high as 132%, with profitability estimates being consistently revised upward.
In terms of sector allocation, the index's 100 constituents are primarily concentrated in two areas: overseas computing power and advanced manufacturing. Approximately 58% of the index weight is focused on the overseas computing power industry chain, covering segments like optical communications and PCBs, which happen to be the sectors with the most frequent upward earnings revisions this year.
Among the top ten holdings, one can find prominent technology companies that have been highly popular this year, such as Zhongji Innolight, Dongshan Precision, China State Shipbuilding Corporation, Yuanjie Technology, and Hengtong Optic-Electric. From optical communications to fiber optic cables, and from PCBs to optical modules, these represent key players in the current growth sectors.
Historically, gaining one-click exposure to this index or these 100 growth stocks required a securities trading account. Now, the E Fund SZSE Growth 100 ETF Link Fund (Class A: 027858 / Class C: 027859) offers investors a convenient pathway to access this index. Even without a stock trading account, investors can conveniently participate in the overall growth stock opportunity through this ETF Link Fund.