GuShiio.com ① Promote the high-quality development of public funds, six significant changes have been seen in the fund industry;
② Excess returns and absolute returns are mentioned by many fund companies;
③ Investment education is the most talked about topic for fund companies;
④ Focusing on making money for investors, fund companies have thought deeply about product design.
Financial News Agency, March 1 (Reporter Yan Jun)Focusing on the high-quality development of the capital market, the main development line of the public offering industry to strengthen supervision, prevent risks, and promote high-quality development has become clearer.
On the basis of promoting the high-quality development of public funds, the supervision has further put forward higher requirements. In March 2024, the “Opinions on Strengthening the Supervision of Securities Companies and Public Funds and Accelerating the Construction of First-Class Investment Banks and Investment Institutions (Trial)” proposed: Strive to promote the formation of about 10 high-quality leading institutions leading the high-quality development of the industry in about 5 years.
With the implementation of the “Implementation Plan on Promoting Medium-and Long-term Funds into the Market”, the problem of blocking points for medium-and long-term funds entering the market has been cleared up, specific arrangements for steadily increasing the scale and proportion of medium-and long-term funds invested in A shares have been clarified, and public funds have been raised. Higher requirements.
It is an opportunity and a challenge. From the perspective of fund companies, after the turbulent market in the past few years, fund companies and investors have grown together. Currently, they have made significant improvements in investment research system construction, product design and planning, sales, and investment education. By balancing functionality and profitability, we will continue to reduce fees and give profits, and truly put making money for investors and focusing on serving the real economy in an important position. At the same time, there are still directions for improvement in current business processes, such as optimizing the assessment system, enriching product categories, strengthening the construction of talent echelons, and improving multi-asset allocation capabilities.
At present, the scale of public funds has exceeded 30 trillion yuan. What new thoughts and trends are there in the public fund industry on the road to high-quality development after the surge in scale? Cailian Research Institute surveyed dozens of fund companies in the industry. They include leading manufacturers, small and medium-sized fund companies, domestic and foreign funds, and jointly discussed the characteristics and trends of current industry development.
From investment research to investment education, six major changes in the fund industry
Under a series of policies to promote the development of the capital market, the A-share market is thus building a healthier and more sustainable investment and financing environment and embarking on a new journey of high-quality development. Among them, as important market participants, public funds serve as bridges in investment and financing. In the era of “star fund managers” craze, passive investment represented by ETFs has flourished, and fund companies have shown six significant changes at the moment.
Change 1: Collaborative operations, integration of investment and research, and platform transformation trend
If a fund company wants to improve investor returns, it basically improves investment performance, and the key department to improve performance is investment research. After the development of the past few years, various fund companies have focused on investment research. The most prominent feature is to de-star and create a platform company that integrates investment and research.
In terms of the integration process, some fund companies stated that through the product committee, the product committee coordinates various business lines to work together to determine product investment styles, and through style factors to control investment disciplines, so that existing products can form a stable investment style. Fund managers become part of the deployment. They “label” all investors through their portraits of fund managers, and determine the styles lacking in the existing system through label identification. Based on this, they supplement and ensure investment talents with different characteristics through internal training and external introduction. The allocation ensures that there are “cards to be issued” under any market style.
In terms of specific methods, taking Galaxy Fund as an example, the company focuses on strengthening the integrated construction of investment and research and improving the conversion rate of investment and research. Consolidate the joint research, special research, and cross-field research mechanisms between fund managers and researchers, improve the effectiveness of the investment research morning meeting, launch the construction of a digital credit investment research system, launch financial data analysis and investment research management platforms, and realize the efficient exchange of information between fund managers and researchers, and continuously improve the team’s investment research transformation and operation efficiency.
Galaxy Fund stated that by optimizing division of labor and cooperation within the team, establishing mechanisms such as competitiveness analysis, special research, and cross-field research, improving the research framework, and enhancing its coverage of industry prosperity and its ability to capture investment opportunities.
“Building a more scientific and complete investment and research system through team collaboration and platform management can effectively improve overall efficiency and stability.” Debon Fund said.
Change 2: The assessment mechanism has quietly changed
Although in the context of salary cuts, assessment and incentive mechanisms are still aspects that fund companies pay more attention to.
Some fund companies believe that the first priority is to optimize investment strategies, strengthen investment research capabilities, and improve the long-term stability of fund product performance. However, when the market fluctuates violently, it is more important to adopt emergency plans in a timely manner to protect the interests of investors. This requires changes in the designated incentive mechanism to encourage fund managers and fund company management to hold their own companies ‘funds to ensure cooperation with investors. The interests are consistent.
Yang Delong, chief economist of Qianhai Open Source Fund, pointed out that it is necessary to strengthen the assessment of industry researchers and fund managers, and focus on research results in the assessment of industry researchers, including whether the recommended company can bring excess returns and whether it can correctly judge the industry. Development trend. The assessment of fund managers should focus on performance orientation, focusing on long-term performance, such as performance for more than 3 years.
Xingzheng Global Fund is more detailed in the assessment period, setting six dimensions of 1 year, 2 years, 3 years, 5 years, 8 years and 10 years to guide investment researchers to pursue medium-and long-term sustainable performance of the product. Ensure the good operation and management of the fund in the medium and long term from the institutional level.
Debon Fund believes that it will continuously optimize the incentive and restraint mechanism, link customer gain sense with fund manager assessment, and guide fund managers to create more stable investment returns for investors from a long-term perspective.
In addition, some fund companies have also stated that the essence of implementing an equity incentive mechanism and creating a partner cultural system is to guide long-term concepts, so that the company’s management, as corporate partners, can focus on long-term interests, abandon short-term gains and losses, and unswervingly follow the correct path of long-term investment and value investment.
Change 3: Excess returns and absolute returns have been mentioned by many fund companies.
In the era of passive fund development, fund companies generally focus their active management on absolute returns and excess returns.
Agricultural Bank of China Financial Management Fund introduced that in terms of investment strategies, the company continues to build a characteristic investment research system. Create a brand with absolute income characteristics and form a more effective absolute income investment model. At the same time, we will consolidate and maintain the advantages of equity funds, strive to grasp the positive trend of the market and seize investment opportunities.
Wu Haiwen, director of the strategic planning and product department of Shanghai Bank Fund, also said that for equity investment clients, we should cooperate with investment research results to help investors grasp the main line of the market to achieve good returns. For example, we should deploy state-owned enterprise dividend-themed funds and focus on investing in high dividends and good cash flow. Enterprises strive to achieve absolute return goals.
Bosera Fund pointed out that public funds can focus on improving the company’s research capabilities and stock pricing capabilities, focusing on improving the ability to allocate multiple assets and risk management capabilities, improving the investment ability of absolute returns, and better through the combination allocation of multiple assets. Disperse risks and provide a source of rich income for investors.
Morgan Asset Management also believes that in addition to embracing the trend of indexed investment, the company has sorted out and optimized the company’s different investment strategies and product lines, hoping to bring long-term excess returns to investors.
Taking the active equity product line as an example, Morgan Asset Management benchmarked Morgan Asset Management’s global active equity strategy and positioned the active equity investment team into three groups: growth, balanced growth, balance and value. These three major strategies, whether in the U.S. market or the domestic market, are relatively mature strategies and have the opportunity to strive for long-term excess returns.
“Tracking errors were differentiated for different styles of fund managers: the products were reorganized and the performance benchmarks of different styles of products were re-matched.” Morgan Asset Management believes that “tracking errors” relative to performance benchmarks should be included in the assessment and “risk budgets” with different tracking errors should be set for different styles of strategies.
Change 4: The investment and research direction focuses on new productivity.
Since the beginning of this year, the science and technology sector has led the market to rise, practiced the strategic concept of serving the country, followed the guidance of national policies, focused on new productivity, improved the level of research empowerment, and made great efforts in public funds.
Bosera Fund stated that the high-quality development of the fund industry requires more functionality than profitability. In order to further enhance investors ‘sense of gain, fund companies must aim at high-quality development, focus on serving new quality productivity, and create investor value as the cornerstone., firmly and comprehensively carry out the transformation of the development model, base the growth of the company’s scale and profit on the foundation of sustainable development of the formation of new quality productivity and investor profits, and strive to create more returns for investors.
Agricultural Bank of China Financial Management Fund stated that it will focus on accelerating the application and issuance of balanced equity products focusing on new quality productivity, scientific and technological themes, low-equity pension, and low-wave dividends. Galaxy Fund also introduced that the company has improved its scientific and technological innovation investment research system and strengthened in-depth research on forward-looking strategic emerging industries and technological innovation enterprises.
Debon Fund stated that it should actively track the national strategic layout, deeply explore industries with long-term and valuable investment value, accelerate the introduction and training of talents in related fields, build and continuously strengthen investment research capabilities in related industries as soon as possible, and create differentiated competitive advantages. An investment direction that is more in line with the general trend of national development is not only an effective way for fund companies to implement the strategy of a financial power, but also an effective way for investors to effectively participate in and share the development dividends of the implementation of national strategies.
Change 5: Reasonable fee reduction and proactive transfer of profits have become buzzwords.
Since active equity funds started to reduce fees in 2023, the scope of profit concessions such as fee reductions and commission reductions by fund companies has been continuously broadened. Currently, fee reductions for active funds, ETFs, QDII funds, bonds and money funds are all in progress.
“The industry’s response to fee reduction trends is also an effective way to enhance customers ‘sense of gain.” Debon Fund said. Reducing fees and transferring profits and enhancing investors ‘sense of financial gain have changed from regulatory guidance and requirements to active choices for fund companies.
China Merchants Fund introduced that in the past two years, the company has successively lowered the management fee rates and custody rates of many of its funds, actively promoted product fee reductions, reduced investor participation costs, and continued to benefit investors. At the same time, it is also actively issuing and establishing inclusive products and issuing the first batch of floating management fee products in the industry to enhance the consistency of interests between fund managers and investors through the layout of products benefiting managers.
Fund companies including Xingzheng Global Fund and Bank of Communications Schroeder have designed and issued floating rate products, striving to better encourage fund managers through floating rates linked to performance, binding the interests of investors and sharing risks.
Ping An Fund said that the company focuses on reasonable profit-making funds. By reducing rates and optimizing product design, these products strengthen the interest binding between public funds and investors, and promote the industry from “scale-oriented” to “return-oriented”. This model not only enhances investors ‘sense of gain, but also promotes the high-quality development of the fund industry, injects more long-term funds into the capital market, forming a virtuous cycle.
Change 6: The main focus is companionship, and teaching has become the top priority of work.
Investment education is the hottest topic and the most willing topic for fund companies nowadays.
Golden Eagle Fund pointed out that fund products are different from consumer goods, and the completion of product sales means that the service has just begun. It is necessary to pay equal attention to after-sales service of products with investment, teaching and companionship, avoid emphasizing sales and neglecting services, improve customer-centered demand response and solution capabilities, strengthen the construction of investment and teaching service system, attach importance to customer experience and companionship, enrich service scenarios, and improve Service level. For example, providing more convenient trading channels, more timely market information, more personalized investment suggestions, etc., especially during the market adjustment stage, giving investors more attention, enhancing investors ‘understanding of the market, and minimizing investors’ irrationality. behavior.
Wanjia Fund said that all parties in the public fund industry should work together to increase investor education efforts and strive to “sell the right products to the right holders at the right time” to bring good investment experience to investors. Actively carry out in-depth cooperation with media and channels, and use rich and diverse online and offline investor education activities to widely advocate the concept of “rational investment, value investment, and long-term investment”.
Through research, fund companies have formed a pattern of online investor companionship matrices and offline investment and education activities. In addition, companies have established a special investment and education department.
Taking Ping An Fund as an example, through online platforms such as its official website, public account, Weibo, Fortune account, and fund manager’s life account, the company provides daily companionship services to investors, in the form of graphics, videos, live broadcasts, etc., and the content includes Market analysis, policy interpretation, anti-fraud knowledge, etc. have built an investor companionship service matrix; go offline into communities and universities to carry out investment education work, and will subsequently explore and expand to places such as senior universities, focusing on a series of activities such as protecting the rights and interests of elderly investors.
Caitong Fund has also made a fuss about pension finance. It has launched a comprehensive pension financial service for “Enjoy a good life”. In response to the call of the China Foundation Association for Infrastructure Development to “Talk about pension in the fund industry”, Caitong Fund has pioneered the implementation of a new linkage model of “product + investment education + public welfare”, involving pension industry research, pension knowledge popularization, elderly care interactive experience, and public welfare activities to help the elderly.
Penghua Fund has many innovations in form, such as actively responding to the call of the “Fund Industry Talking about Pension” investment and education activity, launching a series of innovative investment and education projects for pension education such as the pension ideas of 100 China girls; Establishing a publicly offered REIT investment and education base in colleges and universities, promoting investors to understand the fourth category of assets, innovating investment and education forms in the field of “green finance”, and creating a “green energy first exploration” investment and education IP.
In addition, Galaxy Fund launched the investment education IP image robot “Syndanzi”, and Shanghai Bank Fund launched the original venture capital education IP “Up Duck” and related series of investment education content to use the IP image to better get close to investors for relevant knowledge dissemination.
In terms of department settings, Xingzheng Global has established an investment and education contact person system within it. Through the investment and education contact person, each department participates in the investment and education work, jointly creates investment and education content, jointly supports investment and education activities, and cultivates a batch of gold medal investment and education lecturers, and has been implemented in Xingzheng Global Fund-Fudan Management Institute Investment and Education Base; Morgan Asset Management has specially established the Investor Education Department in 2023, with full-time personnel responsible for the promotion and implementation of investor education work, elevating investment education work to a higher level of corporate strategy and culture.
Puyin AXA Fund introduced that it has always adhered to the “customer-first” value concept in the fields of investor education and companionship services, and improved the “full-process” investor services to build a full-process connection between pre-investment, investment and post-investment. The service system focuses on providing customers with full-life, three-dimensional and diversified companionship and services.
Enhance investors ‘sense of gain, fund companies’ in-depth thinking on product design
From the perspective of fund companies, to improve investors ‘sense of gain, the fund industry needs to start from many aspects such as product design, talent training, reverse sales, technological empowerment, and company internal control. Among them, because fund companies have few resource endowments, product design is one of the most explored directions.
As important suppliers of investment strategies and products in the wealth management market, fund companies should actively promote integrity and innovation in products and businesses, and cultivate professional investment research capabilities.
Bosera Fund believes that the traditional investment areas that public funds are good at are stocks and bonds. Through the construction of investment research capabilities, the assets under management should be gradually expanded to risk management tools such as commodities, overseas stocks and overseas bonds, REITs, exchange rates and futures options, and create a global asset allocation trading framework under multiple asset classes.
“The fund industry must return to its roots, proceed from the interests of investors, strengthen the construction of core investment research capabilities, improve asset allocation capabilities and risk management capabilities in large categories, and strive to enable investors to make money and earn stable returns with controllable fluctuations.” Bosera Fund pointed out that in order to meet the segmented financial needs of different investors, more diversified and refined investment and financial management tools should be created.
China Merchants Fund stated that in addition to the original product types, it should also develop science and technology innovation theme funds, green theme funds, QDII funds, FOF funds, public offering REITs, equity investment, etc. to provide stronger support for the real economy and national strategic development, and also Provide investors with richer asset allocation tools.
Wanjia Fund introduced that as residents ‘wealth management needs become increasingly diversified, fund companies should closely combine the risk preferences and investment goals of different investors and carefully design more diversified product systems. For example, based on the characteristics of different market cycles, timely launch appropriate investment themes or investment strategy products to help investors better achieve accurate matching of their investment needs and products.
Based on the customer needs of low-risk products, Agricultural Bank of China Financial Management Fund grasps structural opportunities in its cargo base and optimizes its bond product line. Based on the advantages of corporate interest-rate bond products, we will gradually increase retail debt-based products, promote the balanced development of retail and institutional channels, strengthen the supply of Internet products, and meet the investment needs of online channel customers.
Cathay Pacific Fund, which is working on passive indexes, introduced that when laying out ETF products, it adheres to the principle of “making small and making big”. Many products have relatively small issuance scales. After continuous investor companionship and cultivation, they eventually grow into industry-leading flagship products. Allowing investors to better use these tools for their own use as they slowly grow is what the company hopes to achieve most in its daily investor services. To a certain extent, this kind of symbiotic and win-win growth with investors is also the only way for the high-quality development of instrument-based products.
In addition, Cathay Pacific Fund also continues to launch closed-period and holding-period products to help investors control the actions of chasing highs and lows and frequently trading from the perspective of product design, and strive for a better long-term holding experience; pilot holding period floating rate fund products realize the bundling of the interests of managers and investors and protect the interests of investors.
Golden Eagle Fund clarifies product positioning through clear theme definitions and investment ratio constraints for actively managed products, such as funds with themes such as carbon neutrality and technology. In addition, it also accurately distinguishes product target customer groups based on the needs of different investors, ranging from products designed specifically for institutional investors to funds mainly for individual investors, and makes corresponding adjustments in investment strategies; For some products with special settings, such as stock-based hybrid funds with long holding periods, mandatory dividend clauses are also specially matched to help investors lock in earnings in a timely manner and improve their investment experience.
Wu Haiwen also introduced that Shanghai Bank Fund starts from investors ‘needs in product design and ends with targeted investment strategies to achieve investors’ investment goals, providing customers with a good investment experience. For example, in response to the stable investment and financial management needs of retail customers, we will lay out a medium and short debt base with various holding periods of 30 days to 180 days, and cooperate with medium and short duration and credit mining strategies to achieve lower retractions and fluctuations.
In addition, Cathay Pacific Fund has profound thoughts around “how the growth of industry size can match the investment experience of holders.”
Guotai Fund said that the rapid development of the industry and the expansion of fund management scale have put forward higher requirements for fund managers ‘investment research capabilities. From a long-term perspective, scale and investment performance do not necessarily have negative effects on each other, but in the process of capital market development, there may be a mismatch between scale and investment income at a certain stage: first, there is a mismatch between investment research team or individual investment capabilities and management scale; second, after the market value reaches a certain scale in the capital market, it will bring some pressure to investment operations.
In this regard, Cathay Pacific Fund pointed out that with the development of the capital market, the appropriate boundary for fund manager management scale is also expanding, but it must match the investment ability and the market value capacity of the industry in order to obtain benefits that match the scale. Bring a good sense of experience to the basic people. This aspect places higher requirements on the investment research capabilities of fund managers. On the other hand, it also requires professional support from the investment research platform behind the fund managers.
