A resignation letter lifted the fig leaf of the GF Fund
Text/Hu Tiehua
In recent years, I have often heard that contemporary young people are reorganizing their workplaces. Unexpectedly, the mutual fund industry has also begun to be rectified.
In a letter of resignation from GF Fund circulated on the Internet, a researcher "angrily tore apart" his own fund manager and publicly complained that the fund manager was not professional, the company's management process was chaotic, and there was serious infighting.
How should GF Fund, whose star fund managers have overturned one after another, face thousands of people?
01 People will leave their jobs, and their words are "not good"
Judging from the content of this resignation letter, the researcher not only expressed his "lack of talent", but also exposed many problems in the management system and management of GF Fund.
The content of the resignation letter, source: Internet
The content of the resignation letter mainly includes the following points:
First, the fund manager's professional ability is not good. The fund manager mentioned in the letter had a lot of luck in the product of "Steady Happiness", which became famous in the past, and in the bull market of core assets in the next three years, the product managed by this fund manager only kept up with the index of partial stock funds and failed to bring excess returns.
The resignation letter also mentioned that in the daily communication with the fund manager, it was found that she had very little research reserves on various assets, taking fixed income as an example, she asked questions such as "why there is a pit in this line" and "is this thing risky", and she was not clear about some very basic concepts. It is such a leader who is not clear about the basic concept, but manages 70% of the department's public offerings, which makes the departing employee very incomprehensible, and suggests that the company continue to evaluate whether she has the management ability of such products.
Second, the management of the department is chaotic. The letter mentioned that the department held less than 4 regular meetings last year, first as a monthly meeting, then directly into a bimonthly meeting, and finally into a semi-annual meeting. Then because I heard that the leader wanted to investigate, I asked everyone to make up for it.
Unexpectedly, the management process of the well-known public GF Fund is even more casual than that of ordinary small companies.
According to the departing employee's description, the department's evaluation is all based on personal liking, and the researcher does not even need to maintain the simulated portfolio, let alone talk about the performance of the simulated portfolio, the effect of fund recommendations, the effect of asset recommendation, and the quantity and quality of reports, but rather who does more chores for the investment manager and who is more obedient.
Although many companies have such problems, for a top 10 well-known public fund, if these problems really exist, it has to make people doubt the company's management system.
Third, the infighting is serious, and the assessment is not objective. The resignation letter mentioned that when the special account was landed, the leader said that the departing employee was not an investment manager, and instead let someone else manage it, and even said something like "even if the whole company recognizes me, she can still stop me".
Unexpectedly, the plot that I thought could only be seen in TV dramas was staged in a well-known public fund.
In general, the lack of professional ability of fund managers, the occupation of important positions by mediocre people, amateur management, and serious infighting are the key accusations in this resignation letter.
02 Who is the target of the "backstabbing"?
According to media reports, the author of the resignation letter has completed the resignation process at GF Fund and is about to join another public offering, and the spearhead in the article is Yang Zhe, general manager of the asset allocation department of GF Fund.
According to public information, Yang Zhe joined Bank of Communications Schroders in 2013 and has successively managed quantitative special accounts and fund portfolios. In 2017, Yang Zhe began to take charge of the investment advisory portfolio of Bank of Communications - I want stable happiness. In 2018, when the market fell unilaterally and the equity market generally performed poorly, this product achieved a positive return of 5.52% that year because of the relatively high proportion of bond allocation.
After becoming famous with "I want stable happiness", Yang Zhe began to shift from investment consulting to FOF, and successively issued two pension FOF in Bank of Communications. Prior to his departure in May 2021, these two products achieved annualized returns of 7.52% and 28.69% respectively, with excellent results.
However, after Yang Zhe joined GF Fund, he was never able to reproduce his former peak. According to the data of Tiantian Fund, many of the FOF products managed by Yang Zhe that have been established for one year have lost more than 10% in the past year.
Yang Zhe's current fund performance, source: Tiantian Fund
As we all know, most investors who hold FOF funds belong to the stable type, and hope that fund managers will allocate high-quality funds at the right time to reduce risks and seize opportunities through portfolio allocation. But unfortunately, Yang Zhe failed to do this.
Although the equity market has generally declined in the past year, it is understandable that the FOF funds managed by Yang Zhe have performed poorly, but if you take a closer look, you will find that many funds managed by Yang Zhe have not outperformed the average return of the same kind, as the resignation letter said, performance depends on luck.
Taking the largest GF Core Preferred Six-Month Holding Mix as an example, the fund was established in January 2021 and currently has a scale of more than 3 billion yuan, making it the largest fund managed by Yang Zhe.
Since its establishment, the fund has lost more than 20%, with a return of -13.92% in the past year and an average return of -10.13% in the same category, and a return of -15.8% in the past two years and an average return of -11.62% in the same category.
GF Core Preferred Six-month Holding Mixed Fund Net Value Trend, Source: Tiantian Fund
It is worth noting that most of the fund holdings of this FOF are dominated by GF Fund's funds, and there is still a lot of overlap in terms of the holdings of the holding funds. For example, the holding funds GF Value Leading Mix, GF Domestic Demand Growth Mix, and GF Baifa Big Data Growth Mix all hold a large number of aviation stocks, including Juneyao Airlines, Spring Airlines, China Southern Airlines, Air China, etc.
In this way, the FOF fund, which is supposed to diversify risks, has invisibly increased the concentration of underlying assets, which means that once the trend of such assets fails to meet expectations, it will have a greater impact on the net value of FOF products.
Similarly, GF Fuxin Preferred Six-Month Holding Blend managed by Yang Zhe also failed to outperform the average return of its peers. The fund was launched on December 13, 2022 and has lost 14.68% since its inception. Among them, the return in the past year is -13.66%, ranking close to the bottom, and the average return of the same kind is -10.13%.
GF Fuxin Preferred Six-month Holding Mixed Fund Net Value Trend, Source: Tiantian Fund
It's like betting on horse racing, and if bad weather causes all the horses to underperform, it seems excusable, but the fact that the bettor often buys a horse that is lower in the rankings can only indicate that the person's vision is wrong.
Of course, although the performance is not good, Yang Zhe has brought a lot of management fee income to GF Fund. According to the data, from 2021 to the first half of 2023, the fund management fees managed by Yang Zhe were 51.6643 million yuan, 71.3829 million yuan, and 41.5269 million yuan respectively, earning 165 million yuan in management fees in two and a half years.
03 Is GF Fund's investment and research problem serious?
As one of the first public funds in China to build FOF teams and investment advisory teams, GF Fund's performance in the FOF field is not satisfactory.
According to public information, in 2013, GF Fund began to prepare for the establishment of the FOF team, in 2014, the Alternative Investment Department was established to be responsible for the research and development of FOF strategies, in 2015, the Asset Allocation Team was established, and in 2016, the Alternative Investment Department was renamed the Asset Allocation Department, which is responsible for the asset allocation business. In 2019, the fund investment advisory business was piloted, and the investment advisory business of GF Fund was managed by the asset allocation team, sharing a group of researchers with the FOF team.
In the asset allocation team, there are currently 5 fund managers who manage FOF: Yang Zhe, Cao Jianwen, Ni Xinchen, Zhu Kun, and Song Jiaji. Among them, Yang Zhe and Cao Jianwen each managed 9 products, provoking the scale of the beam.
However, the performance of these two fund managers who have taken on the responsibility is indeed average.
Yang Zhe's performance has been mentioned earlier, and as for Cao Jianwen, the fund manager, the performance is also a mess. Among the FOF products that have been established for more than one year under its management, except for GF Antai Stable Pension for one year, all of them have negative returns in the past year. GF Forge Ahead 3-month Holding Hybrid under its management ranked at the bottom of all GF FOF products last year, with an annual return of -15.8%.
The income of the FOF fund managed by Cao Jianwen, source: Tiantian Fund
In addition, many of GF Fund's FOF products have been reduced to mini-bases.
At present, the scale of GF Active Return Fund has dropped to 6 million yuan for three months, and it was disclosed in the announcement that the product has been below 50 million yuan for 45 consecutive trading days, or will face liquidation. At the same time, the scale of GF's five-year holding of the active pension target and the five-year holding of the GF pension target 2060 is also about 50 million, which is on the verge of liquidation.
Reading this, you may feel that the current situation of GF FOF products is indeed very similar to the situation described in the resignation letter: mediocre people manage most of GF's FOF products, and the performance is not outstanding.
In fact, the problems described in the resignation letter, such as "fund managers rely on luck to eat", have been reflected in GF Fund's active equity products.
For example, Liu Gexiang, a well-known fund manager of GF Fund, successfully bet on the semiconductor, new energy and pharmaceutical sectors in 2019, and the three funds under his management actually won the top three active equity funds in terms of return that year.
But after the market passed, Liu Gehua's performance plummeted. In the past year, a number of funds managed by Liu Gexiang have generally lost around 30%. For details, please refer to our previous article: From the income champion to the third-to-last, what happened to Liu Gexiang of GF Fund?
Liu Gexiang manages the income of the fund, source: Tiantian Fund
What's even more outrageous is that Liu Gexiang also took over Guolian shares at a high level. Previously, the results of the 2022-2023 information disclosure evaluation of listed companies showed that the evaluation results of Guolian shares' information disclosure were lowered by two levels to D, and the information disclosure evaluation was unqualified. Obviously there were already red flags, but Liu Gexiang ignored them and bought a large amount of problematic stocks. I can't help but wonder where is the professionalism of GF's fund managers?
Another well-known fund manager, Zheng Chengran, also had a similar experience with Liu Gexiang. In 2020, with the bet on the photovoltaic sector, Zheng Chengran's two funds achieved annual returns of 133.83% and 109.3% respectively.
It's just that when the tuyere passes, Zheng Chengran's performance is already devastated, let's take a look at the picture below. For details, please refer to our previous article: Money earned by luck can really be lost based on strength
Zheng Chengran manages the income of the fund, source: Tiantian Fund
The management of GF Fund should seriously reflect on the suggestions made in the resignation letter, especially on the issue of investment research.