With the blessing of the new dividend policy, the "baton" function of the dividend index fund flow will be further amplified

CNR, Beijing, December 17 (Reporter Sun Ruxiang) Recently, the China Securities Regulatory Commission issued and implemented the "Guidelines for the Supervision of Listed Companies No. 3 - Cash Dividends of Listed Companies" and the "Decision on Amending the Guidelines for the Articles of Association of Listed Companies". The new rules aim to urge listed companies to pay reasonable dividends within their capabilities, better play the guiding and restraining role of supervision, promote listed companies to continuously enhance their awareness of dividends, optimize dividend methods, cultivate dividend Xi habits, improve dividend levels and restrain abnormal dividends.

The market generally believes that the introduction of the new dividend policy will help further improve the balance, timeliness and continuity of dividend behavior, and will also strengthen the transparency of the dividend policy. It will certainly contribute to the improvement of the value investment ecosystem and the reform of the investment side to a considerable extent. "Under the background of the new dividend regulations, as an important part of the investment-side reform, the 'baton' function of the dividend index's capital flow will be further amplified. An indexation investment professional researcher said.

In fact, the market has given the answer to the function of the dividend index.

As of the end of November 2023, the overall scale of dividend index products, including CSI Dividend, SSE Dividend and Dividend Low Volatility, exceeded 60 billion yuan, a year-on-year increase of 80% from the end of last year.

From the supply side, the dividend index system is also becoming more and more perfect, as shown on the official website of China Securities Index Company, it manages more than 70 dividend indexes of various types, covering high dividends, low volatility of dividends, dividend value, dividend growth, dividend quality and other strategy types, covering domestic, Hong Kong and Shanghai, Shenzhen and Hong Kong markets.

The market generally believes that the optimization of the dividend policy, the high-quality development of listed companies, and the increasing improvement of the dividend index system will play a more important role in guiding value investment, rational investment, and long-term investment in the innovative development of dividend index and indexed investment in the Chinese market.

The dividend index has become the forerunner of the practice of the "three investments" concept

The Central Financial Work Conference called for intensifying the reform of the investment side, attracting more medium and long-term funds, and better playing the role of the capital market hub. In fact, the current trend of domestic indexation investment is accelerating, and indexation investment has become the starting point for the reform of the investment side.

This year, more than 400 billion funds have flowed into the A-share market through indexed products such as ETFs, and the index has become a market consensus as the "baton" and market "stabilizer" of capital flow, and the concept of indexation investment is being recognized and accepted by more investors.

According to professionals, index and indexed investment are ushering in a period of important strategic opportunities, and there is much to be done in deepening the reform of the investment side.

"As an important indicator to measure the governance quality and value creation ability of listed companies, dividend returns are closely related to investors' sense of return. Lin Xipeng of China Merchants Securities said that cash dividends are of special significance, and the construction of relevant systems is an important part of the reform of the investment side.

"In recent years, while improving the quality of listed companies and encouraging listed companies to continue to pay dividends, the Shanghai Stock Exchange has continued to improve the dividend indexation investment ecology, and strive to play an important role in guiding the 'three investments', namely long-term investment, value investment and rational investment. Market participants believe that the Shanghai Stock Exchange has shown a strong "internal driving force" in the process of innovation and development of domestic dividend index and indexed investment.

In March and October 2022, the Shanghai Stock Exchange and China Securities Index Company successively revised the compilation plans of the SSE Dividend Index Series and the CSI Dividend Index Series.

"These two revisions further strengthen the characteristics of the index in terms of dividend sustainability and high dividend yield, while also enhancing the investment capacity and liquidity of the index. "There are professional reviews.

In addition, in November 2022, CSI released a series of dividend growth indexes, including CSI 300 Dividend Growth Index, CSI 500 Dividend Growth Index, CSI 800 Dividend Growth Index and CSI 1000 Dividend Growth Index. This series of indices depicts the dividend performance of listed companies from the perspective of sustainable growth of cash dividends, forming a differentiated positioning from traditional high-dividend strategies.

"The R&D and innovation of the Dividend Growth Index series have enriched the value investment ecosystem and provided differentiated investment and analysis tools for investors with different risk appetites. So commented the above-mentioned professionals.

The dividend index has risen significantly higher than other indices

In recent years, the moderately loose monetary policy has led to a downward trend in the risk-free rate of return and the yield of bond products, and the demand for financial products with higher yields and more stable has increased due to multiple factors such as the implementation of new regulations on asset management and the low interest rate environment.

"Against this backdrop, it is important to provide investors with investment targets with clear expectations of high dividend returns. Some asset managers said that the dividend index is undoubtedly in line with expectations, because it is based on the selection of listed company securities with high dividend ability and willingness to pay dividends, and strong dividend sustainability as index samples.

The blessing of the dividend policy in the capital market, the high-quality development of listed companies, and the increasing improvement of the dividend index system have helped the rapid development of dividend indexation investment.

The supply of dividend indices is becoming more and more abundant, covering strategies such as high dividend, low dividend volatility, dividend value, dividend growth, dividend quality, etc., covering the domestic, Hong Kong and Shanghai, Shenzhen and Hong Kong markets, providing diversified investment and analysis tools for domestic and foreign investors.

As of the end of November 2023, the overall scale of dividend index products, including CSI Dividend, SSE Dividend and Dividend Low Volatility, exceeded 60 billion yuan, a year-on-year increase of 80% from the end of last year.

In terms of gains, the dividend index is also significantly higher than other major indices.

In the first three quarters of this year, the Shanghai Composite Dividend Index rose 7.0%, the CSI Dividend Index rose 4.8%, and the Dividend Low Volatility Index rose 10.5%. The all-return index considering dividend income performed better, reflecting the defensive advantages of stable income and low volatility of dividend indexes, which was recognized by the market.

"Dividend indices tend to have lower valuations and higher margins of safety, especially in highly volatile markets, which are good defensive attributes, thus forming an important source of stable income. The above-mentioned asset management person said.

The person further explained that on the one hand, in the market downturn, the dividend index sample companies can show strong anti-fall attributes, and the vast majority of dividend indices have a winning rate of more than 70% in the downturn. On the other hand, the long-term compounding effect of dividend index funds is more significant under the premise of considering dividend reinvestment.

The SSE Dividend Total Return Index is a good example of this. Since 2019, its cumulative return has been 51%, of which the dividend reinvestment income of the sample companies accounts for nearly 70%. The high dividend attribute of the sample companies also facilitates the income distribution of dividend index products, thereby enhancing the investment experience of product holders.

The most common prediction in the market is that with the deepening trend of population aging in mainland China, the entry of long-term funds such as social security into the market, the further enhancement of the continuity and stability of dividends of listed companies, and the continuous popularization of the concept of value investment, there is still a lot of room for development of dividend indexation investment.

"Referring to the development experience of overseas mature markets, dividend strategy indices such as dividend quality, dividend low volatility, dividend ESG, and dividend growth are expected to continue to be enriched, and will also help to further guide the continuous dividend behavior of listed companies, market value investment, and long-term investment concepts. The above-mentioned asset management person said.

The scale of dividend indexation products in the global market has grown against the trend

The 2022 annual report on dividends of global listed companies shows that in the context of increased uncertainty and intensified market volatility, the overall dividend level of the global market has increased, and the scale of dividend index investment has increased against the trend.

According to the report, in 2022, nearly 19,000 listed companies in 50 major markets around the world paid cash dividends, accounting for about 48% of the total number of listed companies, and the total annual dividend was about 2.5 trillion US dollars, an increase of 11.8% from 2021.

The total amount of dividends in China's domestic market increased by 23%, and the central and local state-owned enterprises were better than other types of enterprises in terms of dividend level, dividend sustainability and growth, and the role of the capital market as a "ballast stone" was highlighted.

The report highlights that the scale of global dividend index products has grown against the trend, and the high-dividend strategy has the advantage.

As of the end of 2022, the global dividend strategy index product size exceeded 400 billion US dollars, making it the largest tracking strategy index type outside of style indexes. In 2022, the uncertainty of the global macroeconomic environment will increase and market volatility will intensify, and dividend strategies, especially high-dividend strategies, will be favored by more investors as assets with strong defensive attributes. Taking the U.S. ETF market as an example, as of the end of 2022, the scale of dividend ETF products increased by 18.9% compared with last year, and the net inflow of funds for the year exceeded US$70 billion.

In line with global developments, the scale of dividend indexation investment in China has grown rapidly, and the strategy has become increasingly diversified

As of the end of 2022, the total scale of domestic dividend index funds was about 36.58 billion yuan, with an annualized growth rate of about 20% in the past two years. From the perspective of subdivision strategies, the top dividend index products in China are still dominated by high-dividend strategy products established earlier, but the degree of strategy diversification has increased.

"In recent years, dividend multi-factor, industry dividends and other sub-types of products have accumulated a certain market demand, and the proportion of traditional high-dividend strategy products has dropped slightly from 86% last year to 83%, and the domestic dividend indexation investment ecology has gradually developed in the direction of diversification. The analyst added.

Looking ahead, with the increase in the proportion of long-term funds, the continuous improvement of the dividend level and quality of listed companies, and the continuous improvement of the concepts of long-term investment, value investment and rational investment, the innovative development of dividend index and indexed investment in China's domestic market is still promising. (CCTV Capital Eye)

For more exciting information, please download the "Central Radio Network" client in the application market. Welcome to provide news clues, 24-hour reporting hotline [phone], consumers can also complain online through the "Woodpecker Consumer Complaint Platform" of CCTV. Copyright Notice: The copyright of this article belongs to CCTV, and it may not be reproduced without authorization. Please contact [email protected] for reprinting, we will be held accountable for not respecting the original.