Just now, the Financial Associated Press issued an article to evaluate the fund refinancing business, and the fund manager said that the proportion of refinancing is very small, about 7%, in order to increase the income of the people, and some said that because the proportion of refinancing is relatively small, it has little impact on the stock market.
The reporter's investigation also said that the rumors were untrue. Investors will see if it is true or not? Read the full text to see if it is clear. The article is shared below.
In the atmosphere of the market crash, many rumors about fund companies refinancing their holdings to lend their shares, short the market, and make profits for themselves have rapidly fermented.
First of all, a big V posted on the social platform, "I read the annual reports of many funds at night and found a problem, that is, at least 80% of the market value of fund holdings is refinanced and lent short", and pointed out that the refinancing lending business is not classified as the income of fund holders, and the short position exceeds 10 trillion yuan.
"Huabao CSI Healthcare ETF caused WuXi AppTec to fall" is also one of the rumors, and the rumors also named the ETF for ignoring the interests of fund holders. Another rumor pointed to all ETFs, saying that the net inflow of equity ETFs in January exceeded 160 billion yuan, and the purpose of the inflow was to use ETFs as a short-selling tool.
As the above rumors continue to spread, some rational big Vs can't sit still, "Don't spread rumors anymore! ETFs lend individual stocks for refinancing, and the interest income belongs to the people";
Under the mixed voices of many parties, what is the real situation? The reporter of the Financial Associated Press verified with many people in the industry and sorted out the public information, in order to restore the actual situation of public funds participating in the refinancing and lending business.
Verification 1: At least 80% of the market value of the fund position is refinanced and lent short?
The so-called fund participation in the refinancing securities lending business refers to the business in which the fund lends securities to China Securities Financial Corporation through the comprehensive business platform of the stock exchange at a certain rate, and China Securities Financial Corporation returns the borrowed securities and corresponding rights and interests to compensate and pay fees when due.
Judging from many rumors, the proportion of funds participating in the refinancing and lending business is the primary concern of the market. According to the Guidelines for Publicly Offered Securities Investment Funds to Participate in Refinancing Securities Lending Business (for Trial Implementation) issued by the China Securities Regulatory Commission, there are three types of funds that can participate in the refinancing securities lending business: equity funds and partial stock hybrid funds in the closed period, open-end stock index funds and related feeder funds, and strategic placement funds.
The above types of funds correspond to different lending limits.
Funds in the closed period: The assets of securities lent shall not exceed 50% of the fund size.
Open-ended equity index funds and related feeder funds: The securities assets lent shall not exceed 30% of the fund's asset size.
According to the above-mentioned regulatory rules, the rumored "80% of the market value of the position refinancing loan" is obviously untrue. In practice, the information on the fund's participation in the refinancing securities lending business will be disclosed in documents such as quarterly reports, interim reports, annual reports and other periodic reports, so the recently disclosed data of the 2023 quarterly report can be used as a reference, and the actual data is obviously far from reaching the lending limit mentioned in the Guidelines.
Wind data shows that as of the end of last year, 335 funds in the public fund market disclosed the data of participating in the refinancing securities lending business, with a total market value of 79.812 billion yuan, and as of the end of last year, the total size of the corresponding 335 funds was 1.5 trillion yuan, that is, roughly calculated, the ratio of the overall lending securities assets to the fund size was 5.33%.
Specifically, the median value of the 335 products was 6.07% and the weighted average was 10.66%.
Verification 2: A net inflow of more than 160 billion yuan of ETFs has become a short-selling tool?
Specific to the ETF market, as of the end of last year, 264 non-stock ETFs disclosed data on participating in the refinancing securities lending business, with a total market value of 73.022 billion yuan, accounting for 5.51% of the total scale of the above 264 products (1.32 trillion yuan) at the end of last year.
Specifically, the median market value of the refinancing and lending business of these 264 ETFs is 6.07% of the fund size, which is far from reaching the lending limit mentioned in the Guidelines, and the single product has not exceeded 30%.
It should be emphasized that due to the requirement of information disclosure (disclosure only in periodic reports), it is currently not possible to see the latest data on the actual ETF's participation in the refinancing securities lending business in real time through public data.
In this regard, industry insiders told the Financial Associated Press reporter that fund companies should first consider the liquidity of the ETF itself when carrying out ETF refinancing and lending business. In fact, the market value of the specific lending business tends to be relatively low, and there is no "large-scale lending and shorting market" as mentioned in the rumors.
Verification 3: Huabao CSI Healthcare ETF caused WuXi AppTec to fall?
Regarding this rumor, the reporter of the Financial Associated Press learned that WuXi AppTec's share price fell 10% on January 26 and January 29. On January 26 and 29, Wind data showed that WuXi AppTec's market-wide refinancing securities increased to 235,000 shares and 629,000 shares respectively, but according to the opening price of its stock price on the day, its market value was only 17.04 million yuan and 39.63 million yuan, accounting for only 0.55% and 0.61% of the day's turnover of 3.118 billion yuan and 6.476 billion yuan, respectively, accounting for a very low proportion.
In addition, as the tenth largest heavy stock of WuXi AppTec as of the end of the third quarter of last year, Huabao CSI Healthcare ETF held 43,514,300 shares at the end of the third quarter of last year, and the number of shares held fell to 34,955,100 shares at the end of last year.
Judging only from the overall situation of Rongtong's securities lending business disclosed in the 2023 quarterly report, the market value of WuXi AppTec's shares due to restricted refinancing and circulation at the end of the fourth quarter of ETF2023 was 11.3956 million yuan, equivalent to 0.55% of the average daily turnover.
Verification 4: The fund's participation in the refinancing business ignores the interests of fund holders
Behind the above rumors, there is a key point, that is, since the refinancing business of public funds is not included in the fund assets, the participation of public funds in this business ignores the interests of holders.
After checking the relevant business rules, the reporter found that the statement was untrue. According to the relevant business guidelines issued by the China Securities Regulatory Commission, if a fund participates in the lending business, it should refer to the relevant regulations of the industry association for valuation to ensure the fairness of the valuation. This means that the refinancing business is a business that the fund company participates in in compliance with regulations, and the coupon income realized is attributed to the fund assets, that is, the income belongs to the fund holders.
Wind data shows that as of the first half of last year, public funds participated in the refinancing securities lending business, creating a total of 775 million yuan of interest income for investors. Since the public fund participated in the refinancing securities lending business, the ETF has created a total of 3.145 billion yuan of interest income for investors.
Industry insiders told the Financial Associated Press reporter that the refinancing business, as a business that the fund company participates in in compliance, the coupon income realized by it is included in the fund assets, which also means that it can increase the income for fund holders to a certain extent.
For the cost of this business, the reporter of the Financial Associated Press also learned that the main cost of the fund company's participation in the refinancing business lies in the procurement of system modules, the overall amount is small, and it is spent by the company's own funds, rather than in the fund assets, on the contrary, the interest income of the refinancing securities lending business is included in the fund assets, so the two cannot be directly compared.
On the whole, some public fund people analyze that the main purpose of public funds participating in the refinancing securities lending business is to create additional lending interest income for holders and maximize their returns.
From the perspective of investors participating in the securities lending business, the above-mentioned public fund people believe that a considerable number of investors participate in the securities lending business in order to hedge their long positions, rather than simply selling short naked. For example, market makers of some industry-themed ETFs may choose to incorporate a basket of constituent bonds for hedging due to the lack of matching futures contracts.
Further, the original intention of the establishment of securities lending business is to enhance the balance of buying and selling forces, improve the effectiveness and accuracy of securities pricing, and the scale of the refinancing securities lending business is essentially determined by the supply and demand of the underlying securities.
For example, the CSI 300 index constituent securities market research is more sufficient, the pricing is more effective, and the difficulty of lending is greater than that of the small and mid-cap index.
However, the fund's participation in the refinancing business is not without risks, and the risks of financing and refinancing securities lending business include, but are not limited to, liquidity risk, credit risk, market risk, etc., which may have a negative impact and loss on the net value of the fund.
Industry insiders bluntly said that there are not too many direct risks for funds to participate in the refinancing securities lending business, and the potential risk points are concentrated in the liquidity risk of the loaned securities, but in view of the fact that the "Guidelines" set a number of limit conditions for funds participating in the refinancing securities lending business, the probability of real liquidity risk is very small.