After entering the era of "10,000", the public fund market still maintains a rapid development trend. According to the statistics of AMAC, as of the end of the third quarter of 2023, the number of public funds has reached 11,221, with a market size of 27.48 trillion yuan. The development of the number, type and scale of public funds has provided investors with more diversified allocation tools, and how to choose equity funds with excellent performance has also become a widespread concern in the market. It is generally believed in the industry that under the trend of rapid growth in the number of public funds, more and more abundant types, and increasingly complex market structure for many years, professional and impartial third-party rating agencies should become an important cornerstone for protecting investors, and fund ratings from third-party institutions should become an important basis for helping investors choose high-quality funds.
Where do long-term sustainable gains come from?
Fund ratings help you identify good bases for long-distance running
When choosing a fund, most investors tend to choose the fund with outstanding performance based on the fund's past short-term performance returns. However, in the changeable A-share market, it is one-sided to screen funds only based on short-term yield indicators, and even bring direct economic losses. How to evaluate the comprehensive performance of funds more objectively and comprehensively? The evaluation system of public funds constructed by authoritative third-party platforms such as Morningstar is particularly important. Different from the base selection criteria of ordinary investors, fund rating refers to the fund rating agency to collect relevant information, through scientific qualitative and quantitative analysis, according to certain standards, investors need to take risks after investing in a certain fund and the return can be expected, according to the expected return and risk of the fund to rank, and give the corresponding rating.
Taking Morningstar, an international authoritative rating agency, as an example, it generally classifies funds with more than three years of performance data, ranks each category of funds according to risk-adjusted returns, and divides them into five stars according to the normal distribution. According to the star rating ratio, the evaluation ratio from five stars to one star is 10%, 22.5%, 35%, 22.5% and 10% respectively. In other words, only funds that score in the top 10 of their peers will receive the highest five-star rating. In the latest issue of Morningstar Ratings, among the more than 10,000 funds in the whole market, only 416 funds have received five-year five-star ratings, and 215 products have received three-year and five-year "double five-star" ratings, truly realizing the "one out of a hundred" for high-quality funds. In the latest Morningstar ratings, only 137 products have received a three-year five-star rating, 68 have received a five-year five-star rating, and 45 have received a three-year and five-year "double five-star" rating.
In terms of performance, the medium- and long-term performance of products with five-star ratings is generally good. According to the data of the third quarterly report, as of September 30, 2023, the fund has achieved a cumulative return of 155.30% in the past five years, with a performance return of 143.09% higher than the performance benchmark (12.21%), ranking first (1/118) in the performance of large-cap balanced stocks announced by Morningstar in the past five years The rating fund ICBC Strategic Transformation Stock A also performed well, with a cumulative return of 239.17% in the past five years (14.32% in the same period), ranking first in the performance ranking of large-cap value stocks in the past five years announced by Morningstar (1/31) , the excess return is as high as 136.41%. In the past three years of market volatility, the fund has obtained a positive return of 17.41% against the market and an excess return of 30.58% when the performance benchmark for the same period is only -13.17%.
In the context of the continuous and large fluctuations in A-shares, the professional fund rating examines the performance of active equity funds through a medium and long-term perspective, which can provide investors with independent, objective and professional advice to help them make informed investment decisions and help investors explore funds with long-term stable alpha.
How to choose a fund manager?
The proportion of five-star ratings reflects the overall strength
From the perspective of investors, fund ratings can not only play a key role in the screening of individual funds for investors, but also the proportion of products with five-star ratings can better reflect the overall strength of active public companies, which plays an important role in the selection of fund managers.
Which fund company can stand out in terms of the number of five-star ratings? We can also get a glimpse of the clues from Morningstar's latest fund ratings. First of all, in terms of the number of five-star funds of comprehensive equity, fixed income and other types, the long-term performance list and rating report of the fund released by Morningstar show that as of the end of the third quarter, a total of 20 products under ICBC Credit Suisse have received Morningstar's five-year five-star rating, covering active equity, hybrid, bond, overseas, passive, alternative and other product types. It is worth mentioning that under the category of equity products, a total of 15 products of ICBC Credit Suisse Fund have been rated five-year five-star, which is very impressive. In addition, 6 stocks, including ICBC New Finance Stocks, ICBC Logistics Industry Stocks A, ICBC National Strategic Stocks, ICBC Research Selected Stocks, ICBC Pension Industry Stocks A, and ICBC Frontier Medical Stocks A, have won the "Double Five-Star Rating" of Morningstar for three years and five years at the same time.
In addition to "picking stars" in the Morningstar list, ICBC Credit Suisse Fund also stood out on the list of Haitong Securities, another authoritative rating agency. In the latest Haitong Securities rating list as of September 28, 2023, ICBC Credit Suisse Shuangli A has received three five-star ratings for three-year, five-year and 10-year periods, which is rare even among 10,000 funds in the whole market, ICBC Credit Suisse Four Seasons Income A has won the three-year and five-year "double five-star ratings", and ICBC Credit Suisse Consumer Services A and ICBC Credit Suisse large-cap blue-chip have obtained three-year and ten-year five-star certifications respectively, fully demonstrating the investment research and management strength of ICBC Credit Suisse Fund.
With the recovery of economic fundamentals and the implementation of stable growth policies, market sentiment has rebounded recently, and the long-term value of A-shares has begun to be re-examined. Funds with long-term higher ratings usually have better overall strength, while fund companies with long-term five-star ratings that lead their peers in the number of funds usually have stronger investment research platforms, more professional investment research teams, and more advanced investment research systems. When investors choose funds for long-term layout, they may wish to take the fund rating as an important reference, carry out scientific allocation in long-distance performance funds, and strive to achieve wealth growth while controlling risks.
Risk Warning
The investment views in this article are for reference only and do not represent any investment advice or commitment. The fund manager manages and uses the fund property in accordance with the principles of due diligence, good faith, prudence and diligence, but does not guarantee that the fund will be profitable, nor does it guarantee a minimum return. Investment is risky, past performance of the fund is not indicative of future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the performance of the fund. Before investing in a fund, investors should carefully read the "Fund Contract", "Prospectus", "Fund Product Key Facts Statement" and other legal documents, and choose investment varieties suitable for their own risk tolerance on the basis of a comprehensive understanding of the product situation and listening to the suitability opinions of the sales agency. This opinion is only the view of the current time, which may change in the future, and is for reference only and does not constitute any business promotion materials, investment advice or guarantees, nor is it used as any legal document.
Source: ICBC Credit Suisse
Disclaimer: This article is a reprint and does not represent the position of this journal and does not constitute investment advice.