As a rare technical faction in the industry, Bosera Fund has created a series of ETF product patterns from single market to cross-market, from A-shares to cross-border, with its rich experience in indexation, and lives in the ranks of 30 billion ETFs. However, in the face of the 2021 year-on-year surge in new ETF products by 241.7%, the total size of equity ETFs reached 1,063.339 billion yuan of the "crazy" growth trend, how will Bosera Fund keep its strategic determination in the future and create a "Bosera ETF Treasure Box" for investors?
Under the background of the exponential growth of the ETF market size, as one of the "old five funds", the BOSERA Fund ETF business with outstanding comprehensive ability is also "rising".
Since the entry of the first Boshi super-cap ETF in 2009, there have been nearly 30 products in operation by the end of 2021, involving A-shares, Hong Kong stocks, US stocks, commodities, currencies and convertible bonds, etc., in the form of single market to cross-market to cross-border, etF scale is close to 35 billion yuan.
Bosera ETF (non-monetary) operating scale
As a "technical" origin, Boshi has the reputation of "IT Technology Whampoa Military Academy" in the fund industry, and with its own advantages, from the launch of the first "QDII ETF (Boshi S&P 500 ETF)" in China to the first "Touchnet ETF (Bosera Gold ETF)", Boshi has solved the innovation of the underlying settlement mode of a series of products, completed a series of basic technical demonstrations and system improvement and optimization, and laid many technical foundations for the smooth development of ETFs in China.
"The business advantage of Bosera ETF is 'technology + innovation', we can see almost all etf technology models in the market, and Bosera has related tools and products in operation management." Zhao Yunyang, investment director of the Index and Quantitative Investment Department of Bosera Fund, has repeatedly said that Bosera Technology has a leading edge in the same industry.
Guest of this issue: Zhao Yunyang, Investment Director of Index and Quantitative Investment Department
Zhao Yunyang worked in Morningstar China Research Center in his early years, has more than 18 years of experience, joined Bosera Fund in 2010, successively served as quantitative analyst, quantitative analyst and assistant fund manager, has managed stocks, bonds, commodities and other types of asset types of index and ETF products, participated in the innovation and creation of many important index products of Bosera, and is currently the investment director of the Index and Quantitative Investment Department.
As an experienced fund company, seeing market opportunities, seizing the opportunities of the times, and daring to become the "first person to eat crabs" is one of the biggest labels of Bosera ETF business.
As the earliest in the industry to issue and the only one in the market that only tracks the mainstream index of the US stock market, the Bosera S&P 500 ETF, the cumulative return of this product has exceeded 187% since its inception (data source: fund regular report), and the performance at all stages is very good in the stretch.
Bosera S&P 500 ETF gains performance at all stages
Speaking of being able to run for such an excellent index as the S&P 500, Zhao Yunyang is also very confident: "We look at the development of ETFs from a global perspective, as of now, the scale of funds tracking the S&P 500 index in global ETFs is the largest, and the original intention of the product design is to provide investors with a good mainstream asset index through asset allocation, and the final performance also proves the correctness of our choice."
Another "net red" product - Deposit Jinbao, as the over-the-counter share of Boshi gold ETF, due to the originality of the creation of the fund company and the third-party network sales platform cooperation, opened up the number of fund shares and gold grams between the number of conversion, so that ordinary investors do not have to open a securities account, there is no subscription redemption fee, in the OTC can apply for the redemption of gold ETF share of the operation, in 2014 was born in the industry "exploded the pot", this gold ETF share also soared from 200 million to 8 billion, Although it has become a thing of the past, the net value growth rate of Boshi gold-backed ETFs has reached new highs.
Bosera Gold ETFs have been growing at a navigable growth rate since its inception
Source: Fund periodic reports, as of December 31, 2021, the same below
In 2015, the stock market broke out, the market was a chicken feather, at the same time, the long-term allocation value of bonds was highlighted, Boshi quickly launched the main bond investment business, only 2015, 2016 issued 69 bond funds, Boshi fixed income team also grew rapidly in the torrent of the market, Boshi fixed income department from 2009 to 2020, won a total of 10 product golden bull awards.
Solid fixed income experience also allows Boshi to make a relatively excellent fixed income product in the ETF market. According to the fund's regular report data, bosera convertible bond ETFs have achieved a return of 17.63% this year, compared with -0.46% of the CSI 300 index and an average return of -6.21% in the same category.
For the above examples of seizing the opportunities of the times, for example, in 2018 and 2019, in the context of supply-side reform, the first batch of central enterprise ETF products were launched, which helped the reform of central enterprises and also obtained rich returns for investors.
Although the performance of central enterprise products this year is relatively strong, Zhao Yunyang also said in an interview: "What we hope is to provide investors with a clear tool for the asset allocation of central enterprises." A similar point of view was elaborated into the dialogue on this year's sharp retracement of education and the pharmaceutical industry.
Take the road of technological innovation
Create an "ETF Treasure Chest"
King of ETFs: What is the overall layout of Bosera's index investment, including ETFs? Are there any key development nodes?
Zhao Yunyang: ETF was first born overseas as an innovative financial instrument, and its original intention was to provide investors with an asset allocation tool that reduces fees and enhances the flexibility of trading, so the long-term mission of Bosera Fund is to provide investors with the best quality "ETF tool treasure box".
Bosera Fund has officially entered the FIELD of ETFs since 2009 and has been running smoothly in the ETF business for 12 years this year. Specifically, from the end of December 2009, the first Boshi super-cap ETF, the initial offering size of nearly 2 billion, by the end of 2021 we have nearly 30 products in operation, the investment scope involves A shares, Hong Kong stocks, US stocks, commodities, currencies and convertible bonds, etc., the form from single market to cross-market to cross-border, the scale is close to 35 billion yuan.
Overall, the layout of Bosera ETFs presents the characteristics of multi-asset, multi-strategy and diversification.
Looking back, the development of Bosera Fund's ETF business has grown up with the entire Chinese ETF market, and in some ways has also led the innovation and development of domestic ETFs. Overall, there are probably several development nodes in Bosera ETF business:
The first development node was Bosera's first "cross-border ETF" - S&P 500 ETF.
In 2013, Boshi S&P 500 ETF as the first batch of pure U.S. stock ETF products in China, the innovation point launched at that time was the underlying settlement model of this product, after many technical demonstrations and system improvement and optimization, the formation of the initial generation of settlement prototypes, and later the industry on this basis, and constantly carry out technical upgrade iterations, there is a QDII ETF that everyone is more familiar with at present. This product is also the only S&P 500 ETF in China, and the scale has changed from a few hundred million yuan to nearly 7 billion yuan now. (Source: Fund Periodic Reports, as of 2021/12/31)
The second development node is the "touch net ETF" product launched by Bosera for the first time - Bosera Gold ETF.
In 2014, Boshi tried to unite with a third-party network sales platform to launch the Internet gold access business for the first time, when the full name of the product was called "Boshi Gold Exchanged Open-ended Securities Investment Fund Class I Over-the-Counter Share Fund", referred to as "Deposit Jinbao", I believe many people should have heard of this name, because before this gold ETF was an investor in the securities company to open an account to operate, Deposit Jinbao set a precedent at that time, as long as everyone opens an Internet fund account can participate, It opens up the quantitative conversion between the fund share and the gold gram number, which is in line with the investment habits of investors.
Therefore, the hot sales of Boshi Gold on the Internet at that time still caused a relatively large sensation, and also made the industry look at us with admiration. Of course, behind these innovations is inseparable from the technical accumulation of Bosera Fund and the innovation gene that has always been there.
The third development node is the "central enterprise asset ETF" product launched by Boshi.
In 2018 and 2019, Boshi has launched two products represented by the assets of central enterprises - Boshi Central Enterprise Structural Adjustment ETF and Boshi Central Enterprise Innovation-driven ETF, at that time, mainly wanted to revitalize the stock of relatively large central enterprise capital in China through the innovative application of ETF tools, improve the increase of central enterprise capital, and help the high-quality development of central enterprises, these two products are also successfully created the business card of central enterprise assets in the capital market.
King of ETFs: What is the current composition and scale structure of the index team?
Zhao Yunyang: Boshi puts index and quantitative development under a departmental framework, and is called "Index and Quantitative Investment Department" externally. At present, the whole team has 21 people, and the team has a management scale of more than 90 billion yuan, involving the main business is ETF and index business, index enhancement and active quantitative business.
Specific to the index team, there are currently 5 fund managers and assistants, in addition to managing ETFs and index funds of more than 30 billion yuan, we are also involved in tens of billions of special account business management. In addition, unlike other companies, the business members of the Bosera Index team also undertake the investment management of the relevant ETFs and index businesses of Bosera International's Hong Kong subsidiary.
Therefore, the company as a whole attaches great importance to the development of our ETF business, not only providing sufficient support in strategy, but also actively coordinating and cooperating between the company's brokerage department, product department and index and quantitative investment department through product operation, external promotion and product reporting coordination to promote the development of ETF business.
King of ETFs: What are the core competitive advantages of Bosera ETF business compared with other companies in the industry?
Zhao Yunyang: In the ETF business, each company has its own characteristics, and the advantages of boshi ETF business can be summarized as: "technology" + "innovation".
Boshi has the characteristics of "technical school", you can see almost all the ETF technology models on the market, Boshi has related tools and products in the operation and management. This is also an important reason why our current ETF business is characterized by a multi-asset class layout and a multi-client structure.
It is precisely with such characteristics that it also provides a solid foundation for us to build a multi-level ETF ecosystem and establish a more stable ETF circle of friends in the future. We are now increasing the construction of the ETF marketing team of the brokerage department, and "adding another fire" to the marketing operation on the basis of the already solid technology.
King of ETFs: Overall, over the years, Boshi's strength in active quantitative and index enhancement and ETFs has accumulated a lot, have you ever thought of combining these two capabilities to create some "active ETF" products?
Zhao Yunyang: There is definitely this, for the emergence of new products in the market, Boshi usually does not fall.
Boshi index business in the industry is considered to start earlier, the Establishment of Boshi Yufu CSI 300 Index Fund in 2003 is the earliest batch of products in the market to track the CSI 300 Index, after several generations of fund manager iteration, there have been 18 years of experience accumulation. By 2015, we began to try to use a multi-strategy system to operate active quantitative products, because ETFs themselves are a tool form, the real core is how to better obtain alpha enhancement strategies, and these previous accumulated experiences will definitely be grafted and fused on ETF products in the future.
However, at present, the scale of traditional ETFs is still expanding, and in the future, with the more in-depth development of the entire DOMESTIC ETF and the increase in investor recognition, I think there will be more and more active ETF products.
Boshi is also actively preparing, like the CSI 500 ETF enhancement and other wide-based enhancement products, are in preparation.
Don't be short-term, look to the future
Continuously improve the layout of etF product lines
King of ETFs: In what context were boshi's two central enterprise ETF projects issued? Is there something unique about other types of products?
Zhao Yunyang: These two products are both designed by my personal experience and participation, and I am very impressed.
In the early days, the central enterprises and state-owned enterprises in China's capital market all wore colored glasses to observe, because from the historical performance, everyone's stereotype was that "valuation cannot be raised", but we wanted to make differentiated products, and the market was in demand for such tools at that time.
Therefore, in the context of the supply-side reform of central enterprises proposed by the state, Boshi took advantage of the opportunity to create a central enterprise structural adjustment ETF and a central enterprise innovation-driven ETF in 2018 and 2019, which represent the industrial structure adjustment, supply-side reform direction of China's central enterprises, and the direction of central enterprise system upgrading and innovative development, respectively. At that time, it was mainly the two capital operation platforms under the Sasac Commission to initiate the undertaking, the purpose of which was to revitalize the capital stock of central enterprises, promote the capital increment of central enterprises, enhance the influence of the secondary market of central enterprises, and create a famous brand of assets of central enterprises.
Therefore, we will find that compared with the weak trend of wide-based index products, the central adjustment ETF and the central innovation ETF, which have risen by more than 14% and 25% respectively in the past year, are very good, and in an elongated point, the annualized returns of each year in 2019 and 2020 are more than ten percentage points, and each year is a positive return. What we want is to provide investors with a clear tool for the asset allocation of central enterprises. (Data source: Fund regular report, as of 2021/12/31, Bosera central enterprise structural adjustment ETFs rose by 14.94% in the past year; Bosera central enterprise innovation-driven ETFs rose by 25.84%. )
Boshi central enterprises structural adjustment ETF stage increase
Boshi central enterprise innovation drives the etF stage increase
King of ETFs: In terms of broad base, there are currently 8 ETF products on the market that track the SSE 50 Index, where is the advantage of boshi SSE 50 compared with other companies?
Zhao Yunyang: Because when Boshi launched the SSE 50, there were already relatively large products on the market, so our original intention was to consider from the perspective of improving the layout of the entire ETF product line of Boshi.
We have a clear positioning of the SSE 50 ETF at the beginning, because the SSE 50 itself is a configuration-based wide-base index, so we hope to try to get a more stable return for the configuration of customers every year compared to other similar products, from the historical return of this product, we can indeed do it, which is why many institutional investors will choose to allocate our wide-based products.
In addition, whether the small and medium-sized cap will continue in 2022 is also a question that everyone is discussing, but there is no consensus expectation at present, and there are different views.
Whether it is CSI 300, CSI 500 or CSI 1000, they are all broad-based indexes, the strength of the performance mainly reflects the difference in the profit growth rate of the constituent stocks behind it, from 2021, the small and medium-cap stocks such as the CSI 500 and CSI 1000 are indeed better than the profit growth rate of large-cap stocks such as the CSI 300, but in 2022, the differentiation of this profit growth rate is narrowing, that is, 2022 may show a relatively balanced feature.
King of ETFs: In terms of commodity ETFs, Boshi Gold ETFs are the first to get the approval of gold ETFs, and the scale of this featured product has gone from the first 200 million to nearly 10 billion so far, where is the "secret" to cultivate such a large number? What are the investment highlights of this product?
Zhao Yunyang: This product is a product that I have the privilege of working hard with the ETF team after I came to Boshi. At that time, the public acceptance of commodity assets was not so high, and with two gold-backed ETFs already issued before, how we, as a latecomer, found our own unique direction in similar products was the key.
We found that there is a huge difference between the two groups of over-the-counter investors and over-the-counter investors, and the amount of funds involved in the OTC investors is often small, but the customer base is very large, and how to seize this part of the OTC group to accept and participate is very critical. Finally, we conclude that there is a need to cater to the investment habits of the OTC investor community.
That is, back to what I said earlier, we adjusted the gold assets in product design, converted the amount between the fund share and the number of grams of gold, so that over-the-counter investors really saw how many grams of gold were in the account, so we created three types of shares such as gold ETFs in the market and gold D shares and I shares outside the market, corresponding to the three different sales channels of exchanges, direct sales and the Internet, respectively, to cultivate the scale of gold.
In addition, Boshi has the title of "Whampoa Military Academy" in the IT technology of the fund industry, and this product also has our strong technical superposition support behind it. The scale of gold assets once exceeded 12 billion yuan, causing a lot of sensations in the market.
King of ETFs: Why haven't other commodities made relatively successful ETF products?
Zhao Yunyang: Because other commodities like crude oil, agricultural products, etc. are futures, from a genetic point of view, I think it is more difficult to make an ETF. Only gold is spot, and there are currently gold exchanges, coupled with a natural preference for gold by domestic investors, from the perspective of product design, gold ETFs are more in line with everyone's investment habits.
King of ETFs: What advantages do you think investors have when choosing gold-backed ETF assets?
Zhao Yunyang: For ordinary investors, I think from the perspective of asset allocation, gold is a recognized safe-haven asset, especially when other assets are at risk, gold will be regarded as a "life-saving straw".
In addition, gold is recognized as an anti-inflation asset. Especially in the face of the market where the currency is over-issued, gold is a better configuration for the pursuit of value preservation. Compared with physical gold, the cost of buying physical gold such as gold and silver jewelry is very high, and there are many discounts when liquidating, but our gold-backed ETF only needs a small management fee and market commission for investors, which can be quickly realized, and there is no discount.
King of ETFs: In terms of QDII ETFs, Bosera S&P 500 ETF, since its inception, the size and performance of this fund have grown simultaneously, and the yield can be called "line-drawing artists", what is the reason why this cross-border ETF can be so successful?
Zhao Yunyang: From the history of ETF development, it can be seen that the creation of ETFs in China's mainstream indexes often requires declaration and bidding to "grab", and we are very proud to be able to compete for the creation of S&P 500 index targets.
Changes in the size of the Bosera S&P 500 ETF
At that time, we were looking at the development of ETFs from a global perspective, and the fund size of the global ETF tracking the S&P 500 index was the largest, combined with the original intention of the product design to provide a good mainstream asset index for investors through asset allocation, so we chose the S&P 500. For investors, especially for high-net-worth customers with relatively large amounts of funds, the S&P 500 is at least one of the first choices when it comes to diversifying risks for allocation.
In addition, it can be seen that this product has been steadily rising since 2009, which is inseparable from the long bull market of the US stock market that has lasted for many years, along with the beautiful performance of the entire performance, after the gradual recognition of investors, more and more people participate.
Coupled with the continuous iterative innovation of cross-border settlement technology in the market, the subscription time for cross-border products is constantly shortening. For example, when there was no ETF in the past, everyone bought QDII index funds, and the longest time for investors to subscribe for funds was 7 days, and then this time was constantly premised, and T+3 could be achieved, and even the exchange now traded to achieve T+0 realization.
King of ETFs: The overall trend of the medical and education sectors this year is not very optimistic, Boshi also has related ETF products in these two sectors, which are affected by this year's policy drawdown is relatively large, in the face of this industry theme there is a larger drawdown, how does Boshi usually respond?
Zhao Yunyang: Because it is difficult for us to penetrate the future and predict changes in the market.
We always believe that etfs itself is a configuration tool and trading tool, in order to allow investors to have the corresponding tools to allocate when choosing a certain type of asset, no matter what point in time to create, there must always be a tool out.
Taking the Boshi Hang Seng Medical ETF as an example, there was no such product as Hang Seng Pharmaceutical Industry in the market at that time, so we created an asset target represented by the Hong Kong stock medical industry, so that investors can easily allocate related assets through our tools.
In the face of the sharp drawdown of the pharmaceutical industry in 2021, I think investors should still believe in the investment logic and growth after the pharmaceutical, because many people agree with the long-term investment logic of the pharmaceutical, and after the sharp retracement of the industry performance, they continue to increase their positions at a low level, so I see that the share of ETFs in the market is now growing.
And the current decline in the pharmaceutical industry, I understand that it is still in the process of high valuation digestion and internal structure adjustment of the results, like the recent overall strengthening of Chinese medicine is a manifestation of the internal structure of a pharmaceutical in self-evolution.
Therefore, it is recommended that you can pay attention to the changes in medicine.
The same is true of this view in the education sector. Why we will lay out education, is because there is no such asset in the market at present, we in order to provide everyone with a channel for asset allocation, and education has always been a social topic that everyone pays attention to, from the perspective of common sense, there should also be corresponding products to investors to participate.
Although the policy education stock in 2021 did not perform well, but for vocational education and higher education policy is good, we still have to use the development of the perspective to see the problem, as long as everyone still has to receive knowledge education, the entire education industry will always have development.
King of ETFs: Recently, Boshi also has several new products, how to consider the release of new products?
Zhao Yunyang: We mainly develop to improve the layout of Boshi's own product line and create corresponding theme and industry ETF configurations for investors. Moreover, the domestic ETF development process is at least half a year to a year cycle, so we may not consider the short-term market structure and timing problems when issuing products, because the market performance is not transferred by your will, mainly in accordance with your own strategy to improve the layout.
King of ETFs: As the industry's first convertible bond product, what does the successful operation of Boshi Convertible Bond ETF rely on? From a global perspective, the proportion of domestic "fixed income ETFs" is still very small, what do you think is the reason?
Zhao Yunyang: The investment operation of convertible bond ETFs is done by our fixed income team, and the fixed income team of Boshi has always been relatively excellent in the industry, and our product is still good from the perspective of investment performance, tracking error and other aspects.
In addition, we also created it from the perspective of supplementing the asset class, because when we made this product, there were not many convertible bonds in the market, and everyone was discussing whether to create this product, and finally the company's team discussed or decided to provide customers with a convenient investment perspective to do this product.
In the past two years, we can also see the rapid development of the convertible bond ETF market, which has also verified the correctness of our decision-making, especially the overall return on the investment of convertible bonds this year is still quite good.
In fact, very early ago Boshi carried out the attempt of bond ETFs, issued a corporate bond 30 ETF, but later found that this product is difficult to make bigger, because the entire exchange bond volume is relatively small, and the number of investors involved is relatively small, the reason behind the reason is that China's fixed income market transactions are basically in the interbank, so the subject of the on-exchange bond is somewhat incompatible with our existing fixed income market.
At present, Boshi is exploring this cross-market bond product, that is, thinking about how to better introduce inter-bank transactions to the exchange. Some time ago, we also saw that the central bank also had relevant news to increase the promotion of this product, and we also look forward to making such products come out faster.
The king of ETFs: Boshi dividend ETF as a domestic Smart-Beta product exploration is also relatively successful, however, the current successful Smart-Beta products in China are indeed relatively small, mainly focused on the dividend strategy, where do you think the reason is?
Zhao Yunyang: The products of the Smart-Beta strategy are also one of the directions of research and layout in the industry at present, and are mainly concentrated in the reasons for the dividend strategy, which I personally understand is mainly because the dividend strategy is relatively simple and clear, and it is more suitable for the specific needs of specific customers, that is, the investment of dividends is often the relative pursuit of stable returns, or the institutional allocation needs of dividends through dividends.
So why haven't other strategies developed? I think the main reason is that other strategies are not a clear and easy concept for ordinary investors, because for investors, when it comes to strategy, it feels more complicated, like overseas value strategy, growth strategy Product scale can be relatively large, but now for domestic investors these many people may not understand the concept of "value" and "growth".
Therefore, if the products of the Smart-Beta strategy want to develop in the future, they also need to increase with the level of investors' cognition and maturity, and at the same time, they must also accompany the increase in the volume of investors who will configure this style of product in the future, as well as the improvement of strategic stability, and such products may have an outbreak.
King of ETFs: What other innovative ideas does Boshi have in the future of products?
Zhao Yunyang: In the future, we will still adhere to the idea of providing investors with "ETF treasure chests", make efforts in themes and industry products, and will continue to create more than ten mainstream industry and track products.
ETF cake pattern division
The fight is strategic determination
King of ETFs: From the perspective of the United States, ETFs have presented an industry pattern of "several hegemons", and the opportunities for latecomers to divide the cake are getting smaller and smaller, do you think that the domestic current head effect has also been formed?
Zhao Yunyang: Looking at the world, the most successful development of ETFs is still in the United States, and it seems that the development back to China is also following this law.
From the perspective of domestic industry development, the earliest was the Shanghai 50 ETF issued in 2004, but from 2004 to 2014, the ETF has not developed much in the past 10 years, and since 2014, wide-based products such as the CSI 300, the CSI 500 and the Boshi Cross-border S&P 500 ETF have gradually begun to grow.
At present, the technical operation mode of equity ETF products from the whole of China has basically taken shape, the scale has exceeded one trillion, and there are eight million ETF investors, but this is still relatively small for the market value of Tens of trillions of A-shares in China and the volume of nearly 180 million shareholders, so there must be a lot of room for improvement in the future from these two aspects.
At present, there is indeed a head effect in China, but from the perspective of an industrial cycle, it is only the beginning of the growth period, everyone is competing for the share of this "ETF cake", for the top ranking asset management institutions, I think it is the execution and determination of the business development strategy, if you can adhere to the development of your strengths, the future may become the real head.
King of ETFs: What kind of boosters are needed if ETFs want to go to the next level in the future?
Zhao Yunyang: I think there are several major boosters:
First of all, it is the maturity of institutional investors, because etFs themselves provide a powerful tool for asset allocation, and as the maturity of institutional investors increases, the gradual deepening of the allocation concept will bring about stage growth;
Secondly, the weight of foreign investors allocating China has increased, and the continuous and stable inflow of market funds is also a factor for the long-term stability of ETF products;
Of course, what is more important is the improvement of investors' learning and recognition of ETF tools.
EtF King: The discussion of "metaverse" is very hot, Boshi CSI 5G50 ETF can be said to be closely related to the metacosm, including infrastructure, hardware equipment, etc., how do you think of the current debate on the investment value of metacosmity? Is there sustainability?
Zhao Yunyang: Now many people say that the metacosm is equivalent to a game, or a digital currency or something, but I think the metacosm is a larger system, for example, we mentioned that the 5G50 of Boshi is also a sub-section of the metacosm.
From my personal understanding, the meta-universe is currently in the initial stage of thematic investment, but how to develop into a real investment value in the future, I feel that there is still a lot of construction to go through. For example, first of all, technology construction, system construction, system construction, plus the construction of business models and the construction of application scenarios in the metaverse.
King of ETFs: Foreign ESG ETF products have developed very well, and in the context of "carbon neutrality", companies are also embarking on promoting ESG investment. For ETFs in the ESG field, does Bosera have product development and layout?
Zhao Yunyang: Personally, I understand that ESG investment is not simply buying and selling stocks, it is an investment criterion that global institutional investors are practicing and maintaining a "community of human destiny", which is equivalent to the investment principles of each economy actively practicing ESG to find its own characteristics. For example, some time ago, some people in China also said that China's ESG investment principles should have Chinese characteristics.
As a professional asset management institution of "investment value discoverer", Bosera Fund is also actively researching and laying out ESG investment products, and we have previously customized an ESG ETF product, the Sustainable Development 100 ETF, which has been running smoothly for nearly two years.
However, the main difficulty at present may lie in the acceptance of investors, how to open up investors' acceptance of ESG investment in the future, so that the product can have a stable inflow of customers, and achieve stable scale growth is what we need to think about.
King of ETFs: In the past two years, some products have had obvious price reductions, especially in the competition of wide bases, which have been significantly reduced, what do you think of this phenomenon? Will fee reductions be the future trend?
Zhao Yunyang: I think the overall decline in index rates is an inevitable trend of development.
Especially if the overall ETF management scale is still rapidly increasing in the future, the trend of rate decline will be more obvious. Because the entire ETF is a system engineering, at the beginning of the stage of each family to have a lot of investment, because there is no large amount of investment, it is difficult for you to stick to it, so the rate that is just reflected at the beginning is relatively high, and once it reaches the mature stage, all products form a "mass production", the scale and sales rise rapidly, and the rate is naturally a downward trend.
King of ETFs: For ordinary investors, what are the advantages of investing in indices in China? What good advice do you have for investors to participate in ETF investments?
Zhao Yunyang: Returning to the original intention of financial product creation, ETF creation is to provide investors with asset allocation tools, while reducing investors' participation in the market fee to enhance investors' flexibility in trading.
ETF itself is an indexed investment product, investors can quickly configure their own optimistic sectors or themes through ETF tools according to their own understanding of the market. Compared with the previous simple purchase of individual stocks, as long as you grasp the development direction of the entire industry in the industry, you can reduce the investment pain points of many investors.
For investors, ETF investment is participation in indexed investment. Index investment should be happy investment, simple investment, common sense investment, such as do not deviate from common sense, all the things you feel strange or do not understand, try not to participate.
King of ETFs: If you were asked to recommend two books that would be helpful for investors, which two would you recommend?
Zhao Yunyang: The first book is Benjamin Graham's "Smart Investor", on the one hand, this book is mainly to let investors understand the price and value of the market, on the other hand, to know their own circle of ability and form a security boundary.
The second book is Zhang Lei's "Value", which is more easy to understand, because now everyone is more interested in industry and theme investment, and there are classic cases in this book.