"In the past five years, the ETF market has experienced changes in product layout, marketing and publicity, investor acceptance, and even the subversion of the industry pattern. Talking about the feeling of engaging in ETF marketing since 2018, some public offering practitioners sighed. The dramatic changes in ETFs have become a consensus in the market.
In 2023, against the backdrop of volatile market conditions and poor returns of active equity funds, ETFs will break through the encirclement and show a carnival trend. However, under the head effect, not all ETFs can enjoy the dividends of this carnival, and many products have withdrawn from the market. In order not to fall behind in the fierce competition, many public offerings took the initiative or were forced to participate in the "battle of involution", or to reduce the rate or seize the starter, in order to find their own magic weapon to stand out from the encirclement, and at the same time, there are also "calm factions" wandering outside the door, waiting, planning the possibility of a piece of the pie.
Fire and ice coexist
"The team is so busy that their feet don't touch the ground" - this is the best interpretation of the popularity of ETFs during the year.
"In 2023, the company department will participate in more than 1,000 institutional roadshows, channel roadshows, and investment education activities for ETF products. "The company's investment research team conducts roadshows and interviews more than 400 times a year, and has become one of the teams that communicates with investors and outputs views the most in the market. "When it comes to the operation experience of ETFs during the year, the answers given by some powerful public offerings are relatively similar.
In 2023, the carnival momentum of ETFs will be fully revealed, but in the context of scale and liquidity becoming the right to "absorb gold", not all products can enjoy this feast, and many ETFs are facing liquidation crises or even quietly withdrawing, leaving a lonely back for the market. According to data from Oriental Wealth Choice, a total of 39 ETFs entered the liquidation process during the year, of which 12 were terminated by the fund's net asset value below the contract limit, and 27 were terminated by the consent of the fund holders' meeting.
As of the end of the third quarter, only from the perspective of equity ETFs (except for initiation products), among the 719 products available from the whole market data, 92 products have a product scale of less than 50 million yuan, accounting for 12%, of which 19 products have a product scale of less than 20 million yuan. Specifically, as of the end of the third quarter, the scale of equity ETFs, Huatai Barry CSI 300 ETF, has reached 120.04 billion yuan, and the scale of ChinaAMC SSE Science and Technology Innovation Board 50 component ETFs has also exceeded 90 billion yuan, reaching 94.673 billion yuan. In contrast, the scale of SPDB AXA CSI Shanghai-Hong Kong-Shenzhen Consumer Leading ETF is as low as 5.8095 million yuan, with a difference of 120.034 billion yuan. The scale of China Merchants CSI Nonferrous Metals Mining Theme ETF also did not exceed 10 million yuan, only 7.839 million yuan.
It is worth mentioning that the broad-based ETF track has become a battleground for soldiers, and the competition is particularly fierce, and many mainstream broad-based index ETFs have also been forced out of the market during the year. Among them, there are as many as 28 ETF products linked to the CSI 300 Index, but the difference between the beginning and the end of the product scale is more than 120.025 billion yuan, and even the CSI 300 ETF has appeared in the liquidation list during the year. In addition, as of the end of the third quarter, the scale of Industrial CSI 300 ETF and Penghua CSI 300 ETF did not exceed 50 million yuan.
On the one hand, the frenzied layout of new products, on the other hand, the liquidation of "laggards" is frequent, and the "song of ice and fire" played by ETFs during the year has also made practitioners focusing on product marketing anxious.
The Red Sea rises and falls
"Can't stop" - on the basis of a large amount of resource investment and platform construction and maintenance in the early stage, both the head players and industry rookies have been tied to the same tank that never stops moving forward, and the competition tends to be "white-hot", and the homogenization problem cannot be solved, so the fee will be reduced.
On September 5, E Fund announced that the annual management fee rate of E Fund STAR 50 ETF and related feeder funds was reduced from 0.5% to 0.4%, and the annual rate of custody fee was reduced from 0.1% to 0.08%.
Also in September, Huaan Fund and ICBC Credit Suisse Fund also reduced their fees for their SSE Science and Technology Innovation Board 50 ETF and related feeder funds. Among them, the annual management fee rate of Huaan Fund-related products has been reduced from 0.5% to 0.15%.
Yu Fenghui, an economist and new financier, said that the "wave of fee reduction" of ETFs has a positive significance and impact on public offerings, which can improve the competitiveness of ETFs to a certain extent, attract more investors to participate, and increase the scale of products.
However, there is also a view that a rate price war for the sake of increasing the scale is not a long-term solution. According to the current rate structure, it is estimated that the scale of an ETF must reach 3 billion to 4 billion yuan to achieve breakeven. If the fee is further reduced, it will inevitably require the scale of the product itself or the company's overall index business to be large enough to reduce the operating cost of a single product through scale effect, otherwise, the long-term imbalance between revenue and expenditure will not be maintained after all.
In addition to fee reduction, mining subdivision tracks has become the choice of more institutions, aiming to seize the first-mover advantage of "no one else has it". According to the official website of the China Securities Regulatory Commission, on September 4, Yongying Fund became the first fund manager in the whole market to apply for the CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF.
On November 15, Huatai Pineapple CSOP SGX Pan-Southeast Asia Technology ETF (QDII) was officially approved, becoming the first ETF in the market to invest in the pan-Southeast Asia technology industry. As the first Dow Jones Index ETF in China, Penghua Dow Jones Industrial Average ETF under Penghua Fund has been approved and will be officially launched on December 25.
In the view of Guotai Fund, the current ETF layout has approached the red ocean, but there are still many subdivisions to be explored, which requires fund companies to work harder. Since 2023, the investment scope of newly issued ETFs has become more refined than in previous years, further meeting the segmented needs of investors and improving the construction of the ETF ecosystem. Broad-based ETFs, mainstream industry ETFs and other stock markets are already in the red ocean, so it is necessary to use their brains in the incremental market and increase resource investment in products, including the construction and improvement of ETF management teams, the marketing and promotion of ETFs, and the cultivation of ETF professional sales teams.
When the stock products are up and down in the "red sea" and new entrants are gearing up, it is imminent for various public offerings to explore a breakthrough in the ETF market. Guotai Fund believes that the most important thing in the layout of the ETF market is to provide good services and companionship to investors. It is necessary to prompt and analyze the hot spots or changes in the ETF market to investors in a timely manner.
Zhang Yun, general manager of the index and quantitative investment department of Yongying Fund, pointed out that the company's goal in the direction of ETF is to "create a new benchmark for high-quality indexes". He revealed that the follow-up will be in the A-shares, Hong Kong stocks and global QDII and other index categories around the industry theme and Smart Beta to make a differentiated layout, to provide investors with more high-quality underlying allocation tools.
Onlookers lingered
"No new plans" - broad-based ETFs are becoming more and more crowded, industry ETFs continue to be explored, and the index market is undoubtedly a "bonanza", but not everyone wants or dares to become a "gold digger".
As of the end of the third quarter, among the top 30 institutions in terms of public offering under management, the Industrial Securities Global Fund and China Europe Fund, which have total assets of more than 500 billion yuan and 400 billion yuan respectively, have not yet deployed ETFs, and the Bank of Communications Schroder Fund has only established one ETF in 2009 and 2011.
There are concerns about the current layout of ETFs in the public offering. A large public offering insider said that the ability endowment required for actively managed funds is quite different from that of passive index funds, which focus on index development, product design and sales capabilities, and the advantages of active management are not easy to migrate to passive products. In addition, the scale effect of ETFs is obvious, and the initial investment is large, and if it fails to reach the ideal scale, it will also drag down the company's earnings greatly.
"We did ETFs in the early years, but the cost was high for small and medium-sized public offerings, and the development was not as good as the head public offerings, so we had to give up. At present, I have not heard of the relevant new plans, and may still focus on highlighting the advantages of equity products. A person from the public offering market department in Shanghai said frankly.
Different from the hesitation and wait-and-see of some institutions, some public offerings have revealed the trend of testing the waters, planning to take a share of the ETF market. The above-mentioned public offering insider in Shanghai pointed out that the ETF track is relatively more "volume" of marketing resources, channels and investment resources, and some public offerings will consider these aspects when choosing to lay out ETFs, and may choose not to issue products for the time being out of concern about insufficient resources. But at the same time, he also revealed that his institution will soon issue a thematic index fund to fill the product line, but the company's main focus will still be on active equity products.
In the future, the competition in the ETF field may turn to the test of the comprehensive strength of fund managers, including the forward-looking research ability of product layout, the coordination and coordination ability of the company's resources, the ability to cooperate between front-end sales and middle platform marketing, and the refined management ability of daily operation and maintenance of products. The above-mentioned head public fund market people said.
Beijing Business Daily reporter Liu Yuyang Hao Yan