Fan Hua, the new chairman of BlackRock Fund, took office, and most of its products still lost money since their establishment, and BlackRock China New Vision fell into a "five-maoji".
Text/Daily Financial Report Chu Feng
Since the beginning of 2024, there have been continuous personnel changes in fund companies, and the chairmen of many companies have changed. Recently, BlackRock Fund announced the appointment of Fan Hua as chairman, and general manager Zhang Chi will no longer perform the duties of chairman on behalf of the chairman, and the position of chairman who has been vacant for half a year has finally been filled.
As the first wholly foreign-owned fund company in China, BlackRock Fund has high expectations from the industry. The industry hopes that BlackRock funds can play a "catfish effect", introduce asset management experience in overseas markets, and organically combine it with local markets, so as to further stimulate the vitality of the market.
At present, BlackRock funds still have a long way to go to achieve the above goals. In addition to the newly established bond products, all the products of BlackRock funds are green, and the first product, BlackRock China New Vision Mix, has fallen to a "five-cent base", with a cumulative loss of 46.35% since its establishment.
The Daily Financial Report noted that BlackRock China New Vision has a mixed preference for investing in the technology industry. When it was first established in 2021, the product focused on investing in the electronics industry, in 2022, power equipment became the largest heavy industry, and in 2023, the TMT sector appeared, and the product followed the market hotspots.
Can Fan Hua's filling of the chairman's position improve business challenges?
Recently, BlackRock Fund disclosed the chairman's announcement that after the company's shareholders and the board of directors deliberated and approved, Fan Hua assumed the position of chairman on February 1, and from now on, general manager Zhang Chi will no longer perform the duties of chairman on behalf of the chairman. Previously, the position of chairman of BlackRock Fund had been vacant for nearly half a year.
Fan Hua has been in the financial industry since 1998 and has worked in a number of financial institutions at home and abroad, with experience in both fixed income investment and equity investment. For example, Fan Hua served as the executive director of the fixed income trading department of Gao Hua Securities, the director of the bond and absolute return investment department and the director of the asset allocation department of China Investment Corporation, and the chief equity investment officer of CMB Wealth Management Co., Ltd.
In September 2022, Fan Hua joined BlackRock CCB Wealth Management Co., Ltd. as an executive director, general manager and legal representative, and is currently the head of BlackRock China. It is reported that during his tenure at BlackRock CCB Wealth Management Co., Ltd., Fan Hua vigorously developed fixed income products and promoted the scale to grow to about 15 billion yuan.
BlackRock Fund was established in September 2020 and is the first wholly foreign-owned fund company in China. With the blessing of the international asset management giant BlackRock Group, the BlackRock Fund has attracted much attention since its establishment. At the end of August 2021, BlackRock Fund released its first fund product, raising 6.681 billion yuan in 5 days.
With the weakening of the capital market, the management scale of BlackRock funds has also continued to decline, falling to 4.365 billion yuan at the end of the third quarter of 2023. During this period, the market's enthusiasm for BlackRock funds declined, and many of the equity funds released raised were smaller. For example, BlackRock Puyue Fengli held a hybrid for one year, and when it was established, it just met the establishment threshold of 200 million yuan.
In December 2023, BlackRock Fund released its first pure bond fund, and BlackRock Eversheds raised a total of 4.315 billion yuan in 30-day bond holdings, boosting the company's management scale to 8.042 billion yuan by the end of 2023.
The "Daily Financial Report" noted that there are currently 7 fund products under the BlackRock Fund, except for the newly established BlackRock Eversheds 30-day holding bonds, the rest of the products have lost money since their inception and have not yet brought profits to investors.
BlackRock China's New Vision Falls into "Five Maoji"
The first product of the BlackRock Fund is BlackRock China New Vision Blend. With BlackRock's "golden signboard", the product has earned a lot of eyeballs in the market when it was released. After a rebound in the second quarter of 2022, the net value has been declining, with a cumulative decline of 46.45% and a cumulative unit net value of 0.5365 yuan.
(Data source: BlackRock Fund official website, BlackRock China New Vision A net value trend)
In terms of quarters, BlackRock China New Vision has experienced 9 full quarters since its inception, of which 8 quarters have negative performance growth, and the only positive growth quarter is in the second quarter of 2022, with a net value increase of 8.79%. For example, in the fourth quarter of 2022 and the first quarter of 2023, the CSI 300 index experienced positive growth and the net value of the product was negative.
The Daily Financial Report noted that BlackRock China New Horizon's mixed investment style is more biased towards the technology industry. At the end of the fourth quarter of 2021, the largest heavy industry for this product was electronics, with an allocation ratio of 30.54%, followed by banks, food and beverage, and machinery and equipment, with an allocation ratio of more than 10%.
By 2022, BlackRock China New Vision will change its investment direction, mainly focusing on the allocation of power equipment. In the middle of 2022, the proportion of power equipment in this product increased to 46.09%, and the proportion of power equipment in the electronics industry decreased to 17.45%, and at the end of 2022, the proportion of power equipment still reached 33.72%.
In the first half of 2023, as the TMT sector became a hot spot in the market, BlackRock China New Vision Hybrid once again changed its investment direction, investing more in electronics, communications, computers and media in the middle of 2023, with a total allocation ratio of 55.23% in the four industries, and a decrease in the allocation ratio of power equipment to 13.77%.
In the second half of 2023, after the TMT sector was speculated, it will start to "kill valuation". In the third quarter, BlackRock China New Vision mixed in the "meat-cutting" electronics industry, and the top 10 heavy stocks liquidated all the electronics industry, increasing their holdings in food and beverage, non-ferrous metals and banks. Just in the third quarter of the "meat" electronics industry, the product in the fourth quarter and back, the top ten heavy stocks, the electronics industry accounted for 28.63%.
BlackRock China New Vision Mixed said in its Q3 2023 report that the portfolio in the third quarter reduced its overall allocation in the technology sector to reduce the volatility of the overall portfolio in an uncertain macro environment. The product also said in the quarterly report that the portfolio increased the software and hardware technologies needed to benefit from new products in the consumer electronics field in the fourth quarter, such as electronics and mechanical equipment segments.
As the first high-profile wholly foreign-owned fund company in China, the performance of BlackRock Fund's products has been unsatisfactory. The net value of BlackRock China New Horizon's mixed management scale fell to "five gross bases", and the scale was also "halved" compared with when it was established. Fan Hua is the chairman of BlackRock Fund, and it remains to be seen whether he can improve product performance with many years of experience in the securities industry.