Looking back at 2023, the 25-year-old mutual fund industry is undergoing a metamorphosis of breaking the cocoon into a butterfly and reshaping the ecology.
Change is the key word in the mutual fund industry in 2023. This year, the reform of public fund rates was officially launched, and many fund fees such as management fees, custody fees, and transaction commissions were reasonably reduced, demonstrating the industry's determination to make the people benefit and self-revolution. At the same time, the liquidation of mini funds has accelerated, the liquidation of funds has become normalized, and a supply-side reform of the "Wanji era" is quietly underway.
Breaking the situation is the ardent expectation of the mutual fund industry for the future. This year, fund managers said that "it is difficult to make money", the former core assets and popular track stocks have died down one after another, the performance of active equity funds has stalled, and star fund managers have fallen off the altar; the fund market said that "it is difficult to sell", due to the poor money-making effect, the fund issuance market has been cold, and the share of new funds has hit a new low in the past five years.
The clarion call to accelerate the construction of a financial power is calling on the fund industry to shoulder a greater mission in serving residents' wealth management. On the occasion of saying goodbye to the old and welcoming the new, let us pack and seal this year with the "Top Ten Events of Public Funds in 2023", and also wish the fund industry to be reborn and move towards a new journey of high-quality development.
1
The reform of the public fund rate was officially launched
Rate reform is the top priority of the mutual fund industry in 2023.
On July 8, 2023, the China Securities Regulatory Commission (CSRC) issued the "Work Plan for the Rate Reform of the Public Fund Industry", which intends to take 15 measures in stages to comprehensively optimize the rate model of public funds in two years in accordance with the implementation path of "management fees-transaction costs-sales expenses", and steadily reduce the comprehensive rate level of the public fund industry. By the end of 2023, the rate reform of the mutual fund industry has reached the second stage, providing solid support for the industry's consolidation and steady development.
In the first phase, the regulatory policy mainly reduced the management cost to benefit the people. Among them, the management fee rate and custody fee rate of newly registered products shall not exceed 1.2% and 0.2% respectively, and the reduction of the management fee rate of existing products will be completed by the end of 2023.
In the second stage, the commission rate of securities transactions of mutual funds has also been reasonably reduced. In addition, the policy also reduces and strengthens the supervision of the distribution of commissions for securities transactions of public funds, strictly prohibits the commitment of fund securities trading volume and commissions to securities firms in any form, and further optimizes the rate disclosure mechanism of the public fund industry.
In addition to the first round of fee reductions and the second round of commission reductions, the third round will also carry out a series of regulations on the sales of public funds. According to the calculation of the China Securities Regulatory Commission, according to the scale at the end of June this year, the public offering industry will save investors a total of about 14 billion yuan per year after the fee reduction.
The reform of the public fund rate has effectively reduced the investment cost, demonstrated the determination of the industry to revolutionize itself, helped attract more investors to enter the market, and promoted the high-quality development of inclusive finance. At the same time, the fee reform has also promoted the development of the fund industry in competition, strengthened the importance of the core competence of investment research to institutions, and is conducive to optimizing the industry ecology.
2
The scale of public funds exceeded that of bank wealth management for the first time
At the end of June this year, the scale of public funds surpassed bank wealth management for the first time, ushering in a historic moment for the industry.
For decades, bank wealth management has firmly occupied the first share of wealth management among Chinese residents, on the one hand, thanks to the development of China's banking system, and on the other hand, because the people's financial management ideas are relatively stable and conservative. However, since the new regulations on asset management came into effect, the strict supervision of wealth management products has continued to increase, and the scale of bank wealth management has shrunk due to the impact of the collective net breaking of wealth management products at the end of 2022.
At the same time, the scale of public funds has grown steadily. On the one hand, due to the decrease in the supply of high-quality non-standard assets in the wealth management market, wealth management institutions have begun to strengthen active outsourcing management, and the proportion of public fund allocation has steadily increased; on the other hand, with the proposal of "housing for living, not speculation" and the implementation of the new regulations on asset management, the financial management mode of Chinese residents who have long relied on investing in real estate, time deposits and bank wealth management products has gradually changed, and it has gradually become an important choice for investors to achieve wealth preservation and appreciation through fund investment in the capital market.
As of the end of June 2023, the scale of bank wealth management products was 25.34 trillion yuan, while the scale of public fund management in the same period was 27.69 trillion yuan.
3
New fund issuance hit a five-year low
Behind the steady growth of the industry, public funds have also experienced many structural changes in 2023. In particular, due to the continuous market volatility and the weak money-making effect, the new fund market has encountered a "freezing moment".
According to Wind statistics, as of December 26, the number of new funds issued by public funds in 2023 will be 1,229, with a total of 1,119.454 billion shares issued, a decrease of about 24% compared with 2022 and a new low since 2019, and an average of 911 million shares issued, a record low.
From the perspective of product structure, the new fund shows a significant "strong debt and weak equity" characteristics. In terms of the proportion of issued shares, among the newly issued funds since 2023, equity funds (equity funds and hybrid funds) account for only 26.08%, while bond funds account for 70.66%.
In the past two years, the issuance of equity funds has generally been cold, which has a great relationship with the poor money-making effect of equity funds in the volatile market. Due to market shocks, the acceleration of the switch of hot spots in the sector, and the poor overall money-making effect of the fund, resulting in a lack of investor confidence, especially for fund products with rights, the acceptance is relatively low, and the relatively low-risk bond base is relatively more favored by the market.
From the perspective of issuers, the differentiation trend of the public offering industry is also becoming increasingly prominent. Top fund companies occupy an important position in the new fund issuance market, among which the top 20 fund companies with the largest management scale such as E Fund, GF and China AMC issued a total of 578 funds, accounting for 49%, and issued a total of 481.858 billion shares, accounting for 47%. However, at the same time, some small and medium-sized fund companies have issued little or no fund products since the beginning of this year.
In the context of the cold new fund issuance market, since 2023, more and more fund companies and sales channels have begun to pay attention to the continuous marketing of existing funds, and the problem of "emphasizing initial offerings and neglecting operations" has been alleviated to a certain extent.
4
Active equity fund performance stalled
2023 is also a year that is called "difficult to make money" by many fund managers. The overall market volatility and the acceleration of sector rotation have led to the emergence of micro-cap stocks to replace fund heavy stocks, resulting in the overall poor performance of active equity funds in the whole market.
Wind shows that as of December 26, the index of partial stock hybrid funds has fallen by 16.40% this year, which is the third consecutive year that the index has closed negative. Especially this year, the once popular track of new energy has died down, making the performance of funds with heavy positions in new energy suffer a "Waterloo", and many products have fallen by more than 40% during the year.
While the performance of active equity funds has generally stalled, the Beijing Stock Exchange fund, which has always been "niche", may become the biggest winner this year.
As of December 26, the China Beijing Stock Exchange Innovation Select Small and Medium-sized Enterprises Select has a two-year fixed opening with an annual return of 50.29%. This 400 million yuan product managed by Gu Xinfeng has become a "reserve champion base" when it is approaching the "sprint moment" and beats the "seed players" such as Dongfang Regional Development and Soochow Mobile Internet A.
It was followed by Eastern Regional Development in second place with an annual return of 44.78%. Public data shows that the fund achieved considerable gains in the first half of the year with its heavy position in the AI sector, and the fund manager adjusted its position in time when the AI sector was at a high level, maintaining the hard-won "results", thus occupying the top of the performance ranking for several months. At the end of the second quarter, the fund began to shift to the liquor sector, which had been in decline for a long time but showed signs of bottoming, so the net value performance in the second half of the year was relatively stable.
5
ETF shares exceeded the 2 trillion mark
At a time when fund issuance is sluggish and the money-making effect is not good, ETFs have taken up the banner and become the popular "fried chicken" in 2023.
Since 2023, although the stock market has been sluggish and the issuance of equity funds has been cold, investors' "buying more and more" and fund companies have formed a joint force to jointly promote the explosive growth of the ETF market. Wind data shows that as of December 18, the number of ETFs in the whole market has increased to 889, and the total share has exceeded 2 trillion in one fell swoop, setting a new historical record.
In this ETF "big year", there are 15 ETFs in the whole market with an annual share growth of more than 10 billion shares, including ChinaAMC SSE Science and Technology Innovation Board 50 ETF, Huabao CSI Healthcare ETF, ChinaAMC Hang Seng Internet Technology ETF, E Fund CSI 300 Medical and Health ETF and many other leading products. In the past two years, industry-themed ETFs and broad-based index ETFs have exploded in the past two years, which seem to be the mainstream of the ETF market.
The new fund market has also been stolen by ETFs. Among them, the competition of broad-based index ETFs such as the Science and Technology Innovation 100, CSI 2000 and SZSE 50 has attracted a number of leading fund companies to compete on the same stage, and the sales are still hot during the freezing point of issuance, with the initial offering scale of ChinaAMC SSE Science and Technology Innovation Board 100 ETF reaching 3.895 billion yuan, and the initial offering scale of Bosera SSE Science and Technology Innovation Board 100 ETF, E Fund SZSE 50 ETF and Wells Fargo SZSE 50 ETF exceeding 2 billion yuan.
Overall, the share of ETFs in the whole market has increased by about 40% from the beginning of 2023. However, it should be pointed out that the "weather vane" characteristics of ETFs do not lie in the continuous increase in shares themselves, but more in the fact that the shares can grow against the trend in the downturn.
The scale of ETFs in the whole market has not exceeded 2 trillion yuan, and the 15 ETFs with a share growth of more than 10 billion shares have generally had negative returns during the year, showing the characteristics of "buying more and more" of funds.
6
Fund companies set off multiple rounds of "self-purchase tide"
At the same time as the market fluctuates sharply, many fund companies have purchased heavily to express their affirmation of the medium and long-term investment value of China's capital market with real money.
Around August 21, more than 20 institutions, including E Fund, GF Fund, China Southern Fund, China Europe Fund, Ruiyuan Fund, and other public funds, as well as brokerage asset management, announced their self-purchases within two days, with a total self-purchase amount of more than 1 billion yuan.
Since October 29, fund companies have set off a new round of "self-purchase". On the same day, E Fund issued an announcement on the use of inherent funds to invest in its funds, announcing the use of inherent funds of 200 million yuan for self-purchase. Subsequently, China AMC Fund, GF Fund, China Merchants Fund, Harvest Fund and other major public offerings successively announced their own purchases, ranging from tens of millions of yuan to 200 million yuan. In this round of self-purchase, the total amount of self-purchase by fund companies is about 2 billion yuan.
In addition to these two rounds of relatively concentrated "self-purchase tide", some fund companies also made self-purchases at other times. For example, the Bank of Communications Schroder Fund has purchased 200 million yuan of floating rate products Bank of Communications Ruiyuan for three years on a regular basis, and the Great Wall Fund has purchased its Great Wall State-owned Enterprise Preferred Initiation Hybrid, Great Wall Yuli Initiation Bond and other products this year.
Everbright Securities believes that on the one hand, self-purchase by fund companies will help improve the consistency of risks and interests with investors, boost investor confidence and stabilize market expectations, and on the other hand, fund companies can also use self-purchased funds to supplement and stabilize the scale of fund assets. When market sentiment is sluggish, the self-buying wave of funds usually appears as a positive signal that the decline may be stopped and stabilized.
Wind data shows that since 2023, 143 fund companies in the whole market have self-purchased their products, with a total net subscription amount of 111.963 billion yuan, and after removing 105.497 billion yuan of money market funds, the self-purchase scale of equity funds and bond funds is 6.466 billion yuan. Among them, Invesco Great Wall Fund, China Europe Fund, Bosera Fund and many other fund companies have exceeded one billion yuan in annual self-purchase.
7
Small and micro cap quantitative funds are out of the circle
Compared with private quantification, public quantification has been facing the problem of "not growing much" because of more investment restrictions, but in 2023, the rapid development of small and micro cap styles and the rapid rotation of market hotspots will make public quantitative funds out of the circle.
For example, as of December 25, this year's popular quantitative funds Guojin Quantitative Select and Guojin Quantitative Multi-factor have annual returns of 10.16% and 10.37% respectively. Driven by performance, fund manager Ma Fang's management scale has increased significantly this year, from 3.397 billion yuan at the beginning of the year to 29.958 billion yuan at the end of the third quarter, an increase of nearly 8 times.
In addition, the Great Wall Quantitative Small Cap managed by Lei Jun, the Antai Hedging Strategy managed by Sun Meng, and the Bohai Huijin Quantitative Growth managed by He Xiang have achieved gains of 10.91%, 10.87%, and 10.43% respectively this year, and the management scale of fund managers has also risen. Among them, Sun Meng's management scale has reached 16.944 billion yuan at the end of the third quarter of this year, an increase of 169% compared with 6.299 billion yuan at the beginning of the year.
At the same time, a number of "human flesh quant" funds have also continued to become popular, which are characterized by high turnover rates, extremely diversified holdings, and a preference for small-capitalization companies.
For example, "Internet celebrity Shenji" Jin Yuan Shun An Yuanqi recently hit a new high in net worth, with an annual return of more than 23%. However, the fund has started frequent and intensive limit adjustments since the end of 2021, and finally suspended its subscription on August 22, 2022, and has not been opened again, and is known as a "showcase fund".
Similar strategies include Jin Yuan Shun'an Quality Selection managed by Zhou Boyang, Xincheng Multi-Strategy managed by Jiang Feng, and Dacheng Jingheng managed by Su Bingyi, which also performed well this year, with annual returns of 16.98%, 25.25%, and 15.42% respectively.
In Jiang Feng's view, the current market dominated by small caps will continue for a period of time. He believes that for large-capitalization companies, market research is often more sufficient, while small- and medium-capitalization companies have less attention, so it is easier to find excess returns from the announcements and surveys of listed companies; at the same time, with the increasing number of A-share small- and medium-capitalization companies, the future of small- and medium-capitalization stocks can be invested more and more widely, and the growth space will be more and more.
8
Mini funds are cleared at an accelerated pace
In the "Wanji era", the public fund industry is also facing a comprehensive supply-side reform, with the liquidation of mini funds accelerating and fund liquidation becoming normalized.
According to Wind statistics, as of December 27, the number of funds liquidated in 2023 has reached 256, a record high in the past five years, second only to 2018.
In addition to maintaining a high total volume, the liquidation fund also presents three structural characteristics:
First, the liquidation of equity funds hit a record high. As of Dec. 27, a total of 61 equity funds have been liquidated so far in 2023, up from 58 in 2022 and 40 in 2020.
Second, the number of FOF fund liquidations exceeded double digits, reaching 12. Specifically, the liquidation of FOF products first appeared in 2022, but only 4 products were liquidated that year, and the number of liquidations in 2023 soared to 3 times that of 2022, and among the 12 liquidated FOFs, 7 were pension FOF products.
Third, the number of ETF liquidations has increased rapidly. Wind data shows that even in 2018, only 13 ETFs were liquidated, but the number of liquidations has risen sharply from 2021 to 2023, reaching 25, 34 and 32 respectively.
Morningstar pointed out in a research report that there is a "five-year curse" for the fund's survival. Statistics on the survival period of all liquidated funds in history can show that most funds closed early in their lives, and about 85% of the funds in these samples did not even survive to their fifth year, taking the liquidation of funds in November 2023 as an example, there were 181 funds that "died" less than a year after their establishment. Morningstar believes that part of the reason is that the overall market is relatively sluggish, which leads to the dual pressure of redemption and net value decline of fund products, and eventually many products are liquidated.
9
Public Offering REITs 破千亿
Since 2023, the public REITs have accelerated their new launches, expanded and expanded in an orderly manner, and the total scale of products has exceeded the 100 billion mark.
Wind data shows that there are 8 public REITs listed in the market this year, which have been enthusiastically subscribed by investors from all walks of life. Recently, Guotai Junan Urban Investment Kuanting Rental Housing REIT was "sold out in one day", continuing the hot issuance of public REITs, and the fund manager announced the early closing of the fundraising, and will confirm it in accordance with the principle of "full proportional allocation".
As of December 27, there are currently 29 public REITs issued in Shanghai and Shenzhen, raising 95.452 billion yuan, covering toll roads, industrial parks, sewage treatment, warehousing and logistics, clean energy, affordable rental housing, new energy and other asset types, plus the first batch of expanded public REITs net subscription amount of 5.064 billion yuan, the total scale of public REITs in the whole market has exceeded 100 billion.
However, judging from the performance of the secondary market, the overall market of public REITs has not continued to be hot, and the CSI REITs index has fallen by more than 30% this year. Referring to the mature REITs market, China AMC pointed out that overseas REITs have also experienced a stage of small market value and large volatility in the early stage of development, and on the whole, the fourth quarter was affected by product fundamentals and market liquidity problems, and the secondary market of public REITs continued to adjust。
On December 6, the Ministry of Finance and the Ministry of Human Resources and Social Security drafted the Measures for the Administration of Domestic Investment of the National Social Security Fund (Draft for Comments) (hereinafter referred to as the "Draft"), which intends to formally include publicly offered REITs in the investment scope of the Social Security Fund. This move is believed to help boost market confidence in public REITs, stabilize investor expectations, and introduce long-term capital to the market.
10
Wholly foreign-owned public offerings accelerate business development
Since 2023, a number of wholly foreign-owned public offerings have been approved, and the approved institutions have also accelerated the process of doing business in China, and the layout of foreign financial institutions in the Chinese market is moving towards a deeper level.
On August 24, Allianz Fund Management obtained the China Public Offering License, becoming the ninth wholly foreign-owned fund management company approved to carry out public fund management business in China. At the beginning of this year, Schroders and AllianceBernstein were also approved.
Since the abolition of the foreign shareholding restriction policy on April 1, 2020, internationally renowned asset management institutions have accelerated their deployment in China's public offering market.
In 2020, BlackRock took the lead in obtaining the first domestic and foreign public offering license, in 2021, Fidelity Funds and Neuberger Berman Fund were approved, and in 2022, it obtained the public fund business license issued by the China Securities Regulatory Commission. From the end of last year to the beginning of this year, Manulife Fund, JPMorgan Fund, Morgan Stanley Fund, etc. have all undergone equity changes and become foreign-funded fund companies, and so far the number of wholly foreign-owned public funds in China has expanded to 9.
It is worth noting that since the beginning of this year, BlackRock Fund, Morgan Stanley Fund, Fidelity Fund, Neuberger Berman Fund and many other foreign public offerings have also expanded the registered capital of Chinese public offering companies, demonstrating their long-term optimism about China's capital market.
In addition, a number of wholly foreign-owned publicly offered new fund products have also been launched, covering a variety of products such as active equity funds, general bond funds and interbank certificate of deposit index funds. In the context of the steady recovery of economic growth and the continuous promotion of the two-way opening up of the capital market, the Chinese market has huge investment potential from a medium- to long-term perspective, which is an important reason for foreign investors to accelerate their business layout and asset allocation. A number of foreign-funded institutions said that they will continue to increase the Chinese market and share the dividends of the era of China's stable economic development.
Xi Zhang Tianyi also contributed
Editor-in-charge: Gui Yanmin
Proofreading: Peng Qihua