Fund managers are not ranked! Don't chase hot spots, refuse inner volumes... Huang Wenqing, chairman of Zhongtai Asset Management, explains in detail how to "be a good friend on the road of investment"

"We believe that growth is a matter of course, don't deliberately pursue scale. This is actually the same as investing, you are willing to be slow, and in the end it is not necessarily very slow. As long as the action is not deformed, growth is the result. ”

Among the asset management companies of many securities companies, Zhongtai Asset Management is not the largest, but it has a lot of memory among investors.

For example, after winning the public offering license in 2017, it finally chose to launch the public offering product at the market freezing point at the end of 2018. For another example, the company has opened the "Zhongtai Asset Management Group" column on the public account since 2016, inviting fund managers or investment managers to write investment insights every week, which has been updated for more than 200 issues so far.

In addition, with the broadcast of its promotional video, many people found that the original Zhongtai Asset Management did not assess fund managers in a relatively ranked manner.

Recently, Brokerage China interviewed Huang Wenqing, chairman of Zhongtai Asset Management, to understand the management concept and layout behind it.

Zhongtai Asset Management was established in 2014, and according to the data of China Foundation Association, as of the end of the third quarter of 2021, the average monthly scale of the company's private equity active management assets was 138.847 billion yuan, ranking tenth in the industry.

The data boost from management scale doesn't stop there. As of December 31, 2021, the active management scale of Zhongtai Asset Management has exceeded 180 billion. Huang Wenqing said, "Growth is a matter of course, which is actually the same as investment, do not deliberately pursue scale, as long as the action is not deformed, growth is the result." ”

According to the data of Haitong Securities, the absolute return of active equity public funds in the last year and the last two years of Zhongtai Asset Management ranked 12th and 24th among all fund companies respectively; stable and excellent investment performance has also helped it achieve a rapid increase in the scale of equity asset management.

In the investment circle, Zhongtai Asset Management is more famous for the fact that the company does not assess fund managers based on relative rankings, that is, Huang Wenqing's "rejection of internal volume". In Huang Wenqing's view, the pressure of investment is self-evident, many fund managers are often subject to ranking and pressure to deform the action, but if the investment team is diligent and responsible and highly self-driven, then as a company, it should give the team full trust and patience, so that they can invest in accordance with their own ideas and rhythms. Huang Wenqing also laughed and said that if there is a big drawdown in the product, "my main job is to give the fund manager a psychological massage."

In the interview, Huang Wenqing also did not hide the performance of the products managed by Jiang Chao. But he always stressed that the company will always strive to provide an environment that matches the long-term investment philosophy, while focusing on matching the right products to the right investors.

However, compared with the positive feedback and self-disciplined investment team from the scale side, Huang Wenqing is more concerned about making friends with investors. This wish was even written into the company's slogan – "good friends on the road to investment".

To be a good friend, we must abide by the circle of ability

Brokerage China Reporter: The transition period of the new asset management regulations will end at the end of 2021, looking back at the past, what achievements have been made in the transformation of the company's asset management products?

Huang Wenqing: Zhongtai Asset Management (formerly known as "Qilu Asset Management") was established in 2014, since its inception, it has not blindly pursued scale, and has always been based on active management, and the active management scale has accounted for more than half of the period. As of December 31, 2021, the few channel businesses have been basically cleared.

In addition, the company's quotation-based large collection products were all discontinued in November 2021; the change of margin products to monetary funds was also recently approved.

Brokerage China Reporter: Can you talk about your company's asset management business, such as asset management scale, core business direction, and competitive advantages of characteristic businesses?

Huang Wenqing: The asset management industry is very large, there is no shortage of demand, we hope to be everyone's "good friend on the road of investment".

Since they are good friends, they must put the interests of customers first. It's not what the market has, what fires, what we do, that's the company's profit target first approach. Zhongtai Asset Management should focus on its own ability to make competitive products and services, and abide by its own circle of ability.

In the event of a conflict, "customer interests first" means that we want to cede the interests of the company. In 2015, when the Shanghai Composite Index was approaching and breaking through 5,000 points, the market demand was strong, and if you want to issue products, it is easy to obtain a high scale. However, at that time, Zhongtai Asset Management basically stopped issuing equity products and closed the subscription of existing equity products.

In July 2015, due to policy changes, stock index futures were limited, and the company arranged a special opening for a stock index futures arbitrage product that was originally planned to operate in a closed operation for 3 months and was actually established for 1 month, and actively advised customers to redeem.

In addition, in recent years, Zhongtai Asset Management has a product line focusing on high-yield bond investment, and the good reputation has made the scale of the product line nearly 1 billion. Although the characteristics of this product will make the company mistakenly listed by the media as a bond mine-stepping institution from time to time, but this market has investment opportunities, customers have needs, and the investment research team also has the ability, we will continue to do it.

Be a good friend, but also be honest. "Authentic presentation" is not to beautify yourself, because finding customers who fit their ideas can go a long way together. In addition, only if you really feel that this product is good and suitable for customers, it is worth recommending to customers.

Of course, since you are a good friend on the road of investment, you must also strictly control the work of investment and continuously improve your professionalism.

Brokerage China Reporter: What is the current customer structure of the company?

Huang Wenqing: In the past few years, the company's institutional customers accounted for a relatively high proportion. However, with the establishment of the company's brand, especially the establishment of the reputation of public products, the recognition of the company's brand by individual customers from Internet channels is gradually increasing.

Since 2021, there have been two clear trends in our customer structure: First, thanks to the rapid development of Internet channels, the number of individual customers has grown rapidly. Second, equity products with medium- and long-term excellent performance will be recognized by private banking customers. Our Chief Investment Officer, Xu Zhimin, is an investment manager with a management scale of more than 10 billion yuan, and the products he manages have loyal fans in many private banks.

Institutional business is easy to scale, in contrast, individual customers are slow work out of the work, more need to gradually establish word of mouth. However, we are willing to spend a lot of effort to serve individual customers and accompany them to grow up on the road of investment.

Brokerage China Reporter: What does Zhongtai Asset Management hope to focus on? Is there a focus on development equity or fixed income, and what are the future goals?

Huang Wenqing: Which type of product customers have needs, we have advantages, we should provide what kind of products.

For example, the high-yield bond products mentioned earlier, there are not many people in the market, but with reference to overseas experience, it can indeed bring customers a lot of income, and we also have the ability to layout.

Another example is the popular track such as new energy, at present, we can not make differentiated products, then there is no need to issue products for the pursuit of ranking.

In addition to this, companies must provide an environment for investment teams to match their long-term investment philosophy. Some companies' fund managers are subject to pressure and will move out of shape. However, we understand investment better than our clients, so we should provide an environment for fund managers to invest in accordance with their own investment philosophy.

The action is not deformed, growth is the result

Brokerage China Reporter: Can you introduce the current public offering business of Zhongtai Asset Management? What have you learned since the transformation of public offering?

Huang Wenqing: In December 2018, Zhongtai Asset Management issued its first public offering. In the past three years, our performance has been good, and the brand is gradually accumulating.

In terms of public offering business, we did not deliberately expand the scale. We prefer that our customers choose our products by recognizing our long-term investment ability rather than short-term rankings. Because without a deep understanding of our philosophy, it is easy to leave with negative feelings when short-term performance is not good.

In addition, we have always insisted on communicating our investment ideas to investors in a timely and truthful manner. Since you want to treat customers as good friends on the investment road, you must not only help him manage his money, but also often share investment ideas with them and grow up with customers, not just do business.

Our public account has a column every Thursday, called "Zhongtai Asset Management Group", which invites fund managers and investment managers to write investment insights. It has been insisting for nearly 5 years and has updated more than 200 issues. Many investors gradually know, understand and recognize fund managers and investment managers in these daily communication processes.

In particular, Jiang Cheng, at the annual meeting in early 2021, one of the tasks he gave himself was to output 200 investment insights that year. His personal number on the snowball platform is "Jiang Cheng", he does not recommend products, but has been sharing his investment ideas and insights, which is not long but very sincere. In the end, he overtook the task.

To borrow his words, while managing customer money, we must put investment ideas and ideas into the customer's head. Only when the customer truly understands and recognizes, the holding period becomes longer, and the investment experience will be better.

Brokerage China reporter: The competition in the public offering track is very fierce, it is reported that Zhongtai Asset Management does not set up a ranking assessment, how do you think about the industry ranking? How can you avoid excessive involution while taking into account growth?

Huang Wenqing: There is no need to guarantee scale growth, we believe that growth is a natural result, not a deliberate goal. It's the same thing as investing, you're willing to be slow, and you won't necessarily fall behind in the end. Do things according to their own planning and rhythm, the action is not deformed, and growth is the result.

So we don't have a ranking requirement for fund managers, in today's parlance, to reject the inner volume. In fact, it is not necessary, because the investment team is very self-conscious: there are fund managers who get up at 5 o'clock every day and arrive at the company at 7 o'clock, and fund managers who choose to come to the company to do research on weekends, and no one forces them to do so.

Our knowledge and assessment are mainly placed on the entry link, that is, the pre-assessment. Once the people who are like-minded in their investment philosophy, have a complete investment framework and can stick to their own style, there is no need for the company to increase pressure.

In addition, the ranking KPIs are against the relative returns, but our purpose is to help customers make money, and the two are not completely consistent.

Brokerage China Reporter: What institutional support do you think the company needs to adhere to long-term doctrine?

Huang Wenqing: First of all, thanks to the full trust of the parent company, we have the opportunity to practice the right things in the medium and long term of investment.

The second is that the company should provide all-round support, research, sales, customer service, backstage colleagues must give support to the investment team. The ideal state is that the fund manager is a good U disk, as long as it is inserted into the computer of Zhongtai Asset Management, it can immediately play its due role.

To implement investment research, there must be a research framework and process, and the system ensures that the style of the fund manager will not be too misplaced. For example, the listed companies that fund managers want to buy must pass the detailed research and in-depth defense of the research department.

Brokerage China reporter: When there is a large drawdown of the product, what measures will be taken?

Huang Wenqing: Once there is a big drawdown, one of my main tasks is to give the investment team a psychological massage.

Confirming the capabilities of the investment research team is a prior job (before the product starts to operate), and since the capabilities have been confirmed, his ability should not be questioned because of the short-term market style.

In fact, there are many reasons for short-term impact on investment performance, and since we want to understand investment better than our customers, we should lead our customers to understand investment correctly, including understanding the cycle of investment.

I am not afraid of a drawdown in the performance of investment managers. On the contrary, I am afraid that the fund manager will not be confident in himself because of the performance retracement, and the action will drift and even cater to the short-term market.

Recently, the market is very concerned about the drawdown of Jiang Chao's products. However, we still feel that the integration of knowledge and action in long-term investment is first of all a requirement for the management institution, and drawdown is an inevitable thing in investment.

That being the case, it is necessary to confirm in the sales process whether the customer has chosen our products under the condition of fully understanding the product characteristics and risk appetite matching. If the customer has a full understanding of the product, it is natural to understand the drawdown from the perspective of profit and loss.

Be a good promoter of parent company wealth management

Brokerage China Reporter: What is the positioning of asset management business in the brokerage business sector, and how do you view its potential development space?

Huang Wenqing: In terms of the proportion alone, the contribution of asset management subsidiaries to the profits of the parent company is not high, and it has not yet played the role of being ranked with the investment banking and brokerage business as the three pillars.

However, with the downward trend of commission rates, if brokers want to transform wealth management, then asset management is an indispensable promoter for them to carry out wealth management business. Especially in terms of product customization, securities asset management, as the provider of products, can quickly and targetedly provide corresponding support for the wealth management business of securities companies.

Brokerage China Reporter: How is the synergy between Zhongtai Asset Management and other business departments of the parent company?

Huang Wenqing: Zhongtai Asset Management and the parent company have business synergies in wealth management, investment banking, research institutes, margin financing and other aspects. Taking the fund investment advisory business recently vigorously developed by the parent company as an example, Zhongtai Asset Management has also undertaken some of the buyer's investment advisory personnel training.

In addition, the cooperation with the parent company Zhongtai Quantification 30FOF series products is also a manifestation of synergy.

In recent years, the XTP extreme speed trading system independently developed by Zhongtai Securities has won many excellent quantitative private placement recognitions. On the one hand, based on the advantages of this platform, Zhongtai Asset Management can more accurately select excellent quantitative private equity teams; on the other hand, we have an experienced FOF investment research team, build a complete performance analysis closed loop, and select from many aspects such as due diligence, income, drawdown, and strategy stability, to provide investors with better FOF products.

Brokerage China Reporter: Looking at the entire asset management industry, how to differentiate the positioning of securities companies' asset management and public funds, and will securities company asset management fully join the competition of public offerings?

Huang Wenqing: Compared with securities asset management, the first-mover advantage of public funds in terms of products, services and brands is self-evident. But fortunately, the field of large asset management is still a blue ocean, and if securities asset management can create competitive products and businesses, it still has a foothold.

Or that sentence, abide by the circle of ability, do something, do not do something, do what you are good at, match these products and services with the right customers, we can become a good friend on the road of customer investment.

Editor-in-charge: Gui Yanmin