China Fund News reporter Li Shuchao
After the public FOF announced that the public REITs would be included in the investment scope, the professional buyers of the fund finally entered the market.
According to the data, there are currently two public FOF heavy positions invested in four public REITs products, with a total market value of 870,000 yuan.
A number of industry insiders said that the investment of public FOF in public REITs is conducive to the formation of a mutually promoting and win-win situation between the two types of markets. However, at present, the number of public REITs is small and the performance of the secondary market is weak. A number of fund managers suggested that investing in REITs at the current stage should be "carefully selected", and pay more attention to property REITs and varieties that have been wrongly killed.
公募FOF首投公募REITs
According to the 2023 quarterly report, there are two public FOFs - China Universal Futian Fuxin Tianyi Balanced Pension Target held for three years and Tianhong Ruixiang held for three months, and four public REITs products are held in the top ten heavy position funds, with a total market value of 870,000 yuan, accounting for the highest proportion of the fund's net value of 4%.
This is also the first time that the public FOF investment in REITs has been disclosed in the quarterly reports of previous years, which has opened a "precedent" in the market.
From the perspective of the investment direction of public FOF, affordable rental housing REITs and highway REITs are the focus, but compared with the management scale of more than FOF1500 million yuan in public offerings, the market value of 870,000 yuan is still relatively small.
Wind data shows that as of February 3, there were 264 public FOF in the whole market that included public REITs in the investment scope (the shares are calculated together), accounting for 54% of all FOFs.
As a professional buyer of large-scale asset allocation, public FOF has also paid more attention to public REITs that are different from the risk-return characteristics of stocks and bonds.
Talking about the consideration of including public REITs in the portfolio, Wang Fan, manager of Tianhong Ruixiang 3-month holding fund, said that the risk-return characteristics of public REITs products should be positioned between stocks and bonds, and we mainly allocate low-risk products, hoping to play a bond enhancement effect at the moment when the coupon of interest rate bonds and credit bonds is historically low. Xu Bo, Director of Asset Allocation Center of China Universal Fund, also said that as a large class of assets different from stocks, bonds and commodities, public REITs products have a low correlation between the underlying assets and other major types of assets, and have the unique advantages of mandatory high dividends and stable dividends.
"The goal of FOF investment is to focus on long-term stable returns, which is very consistent with the risk-return attributes that REITs can provide, and I believe that more and more FOF will include REITs in the investment scope in the future. Xu Bo said.
Wang Tieniu, director of the Jinxin Fund Evaluation Center of Jinxin, also added that in addition to the relatively low correlation with traditional assets such as stocks and bonds, the underlying assets of public REITs include industrial parks, ecological and environmental protection, energy infrastructure, transportation infrastructure, etc., which will also have positive significance for public FOF to diversify investment and improve the effectiveness of asset allocation. Multiple factors affect the actual public FOF of heavy investment
Although some FOF products have ended up with "real money", judging from the 2023 quarterly report, there are not many public FOF products that actually invest heavily in REITs.
In response to the above phenomenon, Wang Fan said that for public FOF, there are still some barriers to entry for REITs products. Due to the lack of money-making effect for the time being, there is a lack of motivation to do some things, such as IT capital expenditure, sufficient personnel for research and marketing, etc.
Specifically, Wang Fan analyzed, on the one hand, the current real assessment period on the investment side is relatively short, which is equivalent to the duration of the debt is lower than the duration of the asset, so it is difficult to adhere to the long-term investment methodology on the product side; on the other hand, the financing cost of the original equity holder is low, and the cost method can be valued in the balance sheet, while the debt cost of public FOF investors is high, and the market value method is used to value, resulting in a certain difference in the valuation of the primary and secondary markets.
Wang Tieniu also believes that, firstly, the scale and number of public REITs are small, as of the end of last year, there were only 30, which limits the investment of public FOF to a certain extent; second, the weighted price index of REITs fell by 23% last year, and the performance of related products in the secondary market is weak, which also restricts public FOF from participating in investment; third, not all listed public REITs can be included in the investment scope of FOF. For example, the operation period and asset size of REITs products need to meet certain conditions, and at present, public FOF can only invest in a part of REITs.
From the perspective of the secondary market performance of public REITs, after falling by 23% in 2023, as of February 2, the CSI REITs (closing) all-return index fell by 6.22% again since 2024.
Many industry insiders believe that the money-making effect, investment value, market liquidity and volatility of REITs assets are the key factors affecting public FOF investment.
Wang Fan believes that under the existing incentive mechanism and the pricing characteristics of the financial market, more investors tend to enter the market on the right side, and if the public REITs market has a money-making effect, the pace of public FOF investment will be significantly accelerated. The addition of more types of investors and more investable categories will achieve a win-win situation for both markets in the long run. He suggested that REITs should diversify their product categories, position themselves as funds and securities, introduce more investors, and improve the incentive mechanism of institutions from shareholders to employees, which may help to activate the market.
Wang Tieniu also said, "I believe that more and more FOF will consider allocating REITs in the future, but whether the property rights structure of REITs products is clear, whether there is continuous operation ability, whether there is continuous and stable cash flow returns, and the liquidity and volatility of the secondary market will be the main factors restricting FOF allocation of REITs." ”
In terms of investment, it is necessary to "carefully select" and favor property rights REITs, wrongly killed varieties, etc
After a long period of adjustment, many industry insiders believe that the valuation of public REITs has gradually become reasonable, the margin of safety has been thickened, and there has been a high long-term allocation value.
Xu Bo said that at the current point in time, the quarterly report of public REITS has been fully disclosed, and the operation of most projects is relatively stable. Whether it is a property right or a franchise project, the dividend rate is relatively high, and the stability and certainty of the dividend are relatively strong. With the sharp decline in the price of the secondary market, the investment cost performance of REITs products has increased significantly, and the overall market is not pessimistic.
"From the perspective of investment, we still have to further select the varieties, in the current overall decline in public REITs, there are still a lot of stable operation, high dividend rate, long-term cost performance outstanding but been killed by mistake, for these varieties we are very optimistic. Xu Bo said.
Wang Fan also said that theoretically, if compared with bond assets with historically low coupon rates, equity REITs have a clear long-term investment value. Even managers of asset management products with a short assessment period and limited amount of funds under management on the liability side should gradually increase the allocation of equity REITs assets for low-risk products.
Lawyer Hu Hao and lawyer Sun Kexin of Beijing Yingke Law Firm believe that more participation of professional institutional investors plays a pivotal role in the long-term and healthy development of public REITs: on the one hand, it will help boost market confidence, and on the other hand, it will help the value evaluation of public REITs to be more reasonable.
"While professional institutional investors play a pricing function, they can effectively reduce the large fluctuations in prices in the secondary market, which is conducive to attracting more investors to invest in the REITs market, thereby promoting the long-term and healthy development of REITs products. Xu Bo also said.
Editor: Captain
Review: Xu Wen