First, [Nancai Wealth Management] Comparative analysis of the scale of monetary funds
On 14 January 2022, the China Securities Regulatory Commission (CSRC) issued the Interim Provisions on the Supervision of Important Money Market Funds (Draft for Solicitation of Comments) (hereinafter referred to as the Interim Provisions), which clarifies the definition and assessment scope of important monetary funds and puts forward stricter and more prudent requirements for important monetary funds.
According to the scope of the preliminary assessment of the Interim Provisions, money market funds whose net asset value of the fund exceeds 200 billion yuan for 20 consecutive trading days, or the number of fund share holders exceeds 50 million for 20 consecutive trading days, are included in the assessment scope of important money market funds. It is worth noting that different money market funds managed by the same fund manager and sold by the same fund sales agency should be combined.
Valuation indicators and the list of determination includes but is not limited to indicators such as net asset value, relevance, fungibility and complexity of the fund, the CSRC will determine the list of important money market funds based on the assessment results and relevant auxiliary information and publicize them in accordance with the regulations, and within 3 months after the publicity, the important money market funds shall meet the requirements of the regulations.
Wei Zhen, general manager of the second department of fixed income investment of Bosera Fund, pointed out that there are bottlenecks in the scale of platform shares and institutional shares. Supervision has been guided by windows in the early stage, and the corresponding scale of each fund company in a single sales agency is expected to be about 200 billion. For institutional shares, the short-term scale bottleneck in the existing market environment is about 300 billion yuan for a single company.
As of January 17, the only funds with a single fund size that meet the above conditions of 200 billion yuan are Tianhong Yubao and E Fangda Easy Wealth Management, with the latest scales of 764.579 billion yuan and 232.164 billion yuan respectively. From the third place, the size of the funds is not very different. It can be said that the scale of the "Tianhong Balance Treasure Currency" fund has a fault-type advantage.
According to Choice data, for the top ten fund companies in the market in terms of total size, the total amount of monetary funds exceeds 200 billion yuan.
In addition, the Interim Provisions also lower the upper limit ratio of assets held by liquidity restrictions, reduce the leverage ratio, and impose a 5% limit on redemption, making the response to single-day redemption more stringent and ensuring liquidity. Under the requirements of a series of measures such as increasing the frequency of stress tests, the prevention of systemic risks is also increasingly perfect.
BOC Research believes that the test of the regulations for large fund companies mainly focuses on the balance of performance, risk control and other aspects; and because large third-party platforms may introduce the needs of other fund companies due to the limitation of the scale of consolidated calculation, it may be a major benefit to small and medium-sized fund companies.
At the same time, from the perspective of the general trend of the same supervision, the research group believes that similar additional regulatory requirements may be extended to bank cash management products in the future. According to the Semi-annual Report on the Wealth Management Market of Banks of China (2021) and the Asset Management Association of China, as of the end of June 2021, the total scale of cash management wealth management was 7.78 trillion yuan, the size of monetary funds was 9.27 trillion yuan, and the total scale of cash management wealth management was about 84% of the total size of money funds.
From the perspective of institutions, at least five wealth management companies, including CMB Wealth Management, Jianxin Wealth Management, ICBC Wealth Management, etc., have a cash scale of more than 200 billion yuan.
Not only that, but there are also a single large number of cash products. For example, as of the end of the first quarter of 2021, the total share of ICBC's "ICBC e-Lingtong ELT1401" products reached 252.1008 billion. As of the end of the second quarter, the total share was 199.9017 million shares. Although the total share of products in the second quarter has dropped, this is still a "gold sucking king" with a total share of nearly 200 billion shares. However, as of the end of 2021, the latest disclosed share of the product was 71.3517 billion shares, and the scale shrank by more than 60% in half a year, compared with the end of the first quarter, which was more than 70%.
Previously, the relevant person of ICBC Wealth Management revealed that "e-Lingtong ELT1401 is an old product of the head office, (2021) has been closed in early August, the pressure drop (scale), only in and out."
II. Income Performance of Cash Management Products of Wealth Management Companies (as of January 17)
As of January 17, the seven-day annualized income list of cash management products of wealth management companies has the products of 5 wealth management companies entering the top ten list, namely IB Wealth Management, CNCBI Wealth Management, Huaxia Wealth Management, Everbright Wealth Management, and Ping An Wealth Management. Among them, IB Wealth Management and Huaxia Wealth Management each listed 3 products, Everbright Wealth Management listed 2 products, and the rest of the wealth management companies each listed 1 product.
IB Wealth Management "Tim Lee No. 5" seven-day annualized yield of 3.80% ranked first. The product was established on May 24, 2019, with a performance benchmark of 7-day notice deposit rate, an internal risk rating of R1, a minimum purchase amount of 1 yuan, and an initial fundraising size of 1.19 billion yuan.
Since November 3, 2021, the sales object of "Tianli No. 5" has changed from only to institutional investors in the financial industry to individual investors and institutional investors.
According to the product's third quarter report in 2021, the product share of "Tianli No. 5" at the end of the period was about 19 billion shares, and the average daily scale in the third quarter was 23.9 billion yuan, which continued to decline by 2.6 billion yuan from the first quarter. During the reporting period, the average seven-day annualized yield was 2.91%, and the income of 10,000 shares was 0.7672 yuan.
From the perspective of asset portfolio, 83.5% of the product is directly invested in bonds, 16.5% is directly invested in cash and deposits, and from the perspective of the top ten positions, nine of the top ten positions of the product are interbank or interbank certificates of deposit.
(Figure: "Tianli No. 5" at the end of the third quarter of 2021 top ten position details, source: the product three quarterly report)
In addition, the product invested in 43 securities issued and underwritten by related parties at the end of the reporting period, and there were no material related party transactions.
The Research Group of Nancai Wealth Management selected 5 new financial products for reference. According to the data of Nancai Wealth Management, CMB Wealth Management CRUI Ruiyuan is worthy of attention to the two-year closed No. 1 enhanced fixed income wealth management plan, which was raised from January 18, 2022 to January 24, 2022, and the product was established on January 25, starting from 100 yuan, the operation mode is closed-end net worth type, the investment nature is fixed income, and the risk level is R3 (medium risk).
Through comprehensive analysis of macroeconomic trends, fiscal and monetary policies, interest rate fluctuations and trends, interest rate term structure, credit risk and interest rate variations and other factors, under the premise of conforming to the investment scope and investment ratio of products, comprehensively consider the profitability, liquidity and risk characteristics of various investment varieties, and strive to obtain an investment return of 4.80%-7.00% higher than the performance comparison benchmark.
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