Jimin has lost a lot, where did the star fund manager go
In the era of national buying, whether it is a bear market or a bull market, public funds are easy to stand on the cusp of public opinion.
On March 15, the China Securities Regulatory Commission issued the "Opinions on Strengthening the Supervision of Securities Companies and Public Funds and Accelerating the Construction of First-class Investment Banks and Investment Institutions (Trial)", which proposed to abandon the phenomenon of star fund managers and strengthen the construction of a "platform-based, team-based, integrated and multi-strategy" investment and research system. The "de-staring" trend of the fund industry has been going on for a long time, and now it has been reaffirmed.
"I bought Gülen's Sino-European Healthcare Mix at the beginning of 2020, initially invested 30,000 yuan, and earned about 5,000 yuan in the first month. Chen Miao, who has been "buying foundations" since his college days, told China News Weekly. However, the good times did not last long, and major sectors such as pharmaceuticals and consumption have fallen since 2021, and several products she has invested in have shown negative returns since the beginning of 2022, with an average decline of about 40% so far. "They took such a high management fee in the past few years, and now they are losing money like this, can the fund company and the manager apologize to the people?" With a little resentment, she said the voice of most people.
"Investors' dissatisfaction boils down to a poor sense of investment, and the biggest factor affecting the sense of investment gain is investment losses, especially for investors who chase high and enter. Tianxiang Investment Advisory Fund Evaluation Center analyzed "China News Weekly" that fund managers' "running away" and fund companies' "drought and flood income protection" also increased investors' dissatisfaction. "The 'star-making movement' of fund managers back then is indeed worthy of serious reflection by the entire industry. ”
After experiencing the "money-making effect" in 2019, the mutual fund industry ushered in a "star-making" boom from 2020 to 2021. How to anchor one's own positioning and development path and improve one's professional ability between the short-term game and the pursuit of long-term value is a long-term issue that fund companies and the public offering industry need to consider.
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Jimin "turns from pink to black"
"The first time I bought a fund was in 2019, and at that time, everyone was buying what they were making money. I bought a few thousand yuan at a young age, and I earned a few hundred yuan in the first week, and then I started to read the news shared by financial and fund bloggers on Weibo every day, and followed them to buy. Chen Miao, a college student at that time, was a member of the "new basic people" group that emerged with the opening of the Internet fund era.
The "inflated era" of public funds has been foreshadowed before. In June and July 2017, the Fortune accounts of the platforms to which the two major Internet fund sellers, Ant Fortune and Tiantian Fund, are affiliated to one after another, welcomed the entry of leading fund companies. Since then, while opening up sales channels, fund companies have also gradually increased their operational investment in the field of Internet finance, and jointly promoted the popularization of fund investment with the platform.
According to data from the Asset Management Association of China (AMAC), in 2017, the effective accounts of public funds increased by 55.2% year-on-year, the highest in history, and the number and share of funds in the whole market increased by about 25% year-on-year. By the end of 2023, there were 1.522 billion effective accounts of public funds, and by the end of February 2024, there were 11,600 funds in the whole market, with a total share of 28.02 trillion shares, and 146 fund managers.
While the industry continues to expand, the investment preference of China's capital market also rotates rapidly in a three-to-five-year cycle. "After the collapse of theme stocks in early 2016, investors tended to be cautious and turned to pay attention to white horse stocks and public funds, and in 2017 it ushered in a wave of issuance peaks, and in 2018, the market valuation was hit to a historical bottom, and the market returned to bullishness in 2019. Xi Wenchao, the manager of the fund observation self-media "One Foundation Mao", told China News Weekly.
Wind data shows that from the beginning of 2019 to the end of 2020, more than 1,600 funds have more than doubled their net value. "Many fund managers have an annualized rate of return of 30%~40%. According to the law of history, 10%~15% is already qualified, and 15%~20% is excellent. He said.
On top of the tuyere, fund managers who were able to seize the opportunity of the track to achieve high returns at that time, and who attracted attention because of their distinct personal investment framework and ability to select stocks at the right time, became the protagonists of the "myth".
At the end of 2020, with a total management scale of 125.509 billion yuan, E Fund Zhang Kun became the first 100 billion yuan active equity fund manager in the more than 20 years of China's public fund development. This year, E Fund launched a total of 4 purchase restrictions for small and medium-sized caps, and the transaction limit was gradually reduced from RMB 1 million to RMB 2,000, while E Fund's blue-chip select mix was limited to RMB 1 million.
The continuous reduction of the transaction limit cannot stop the enthusiasm of the people to chase the rise. On January 25, 2021, the single-day net value of E Fund's blue-chip select blend soared by 5.05%, Zhang Kun and "blue chips" topped the hot search, and the fan names "iKun" and "support club" were also born.
Subsequently, the market continued to usher in two 100 billion fund managers, Liu Yanchun of Invesco Great Wall and China Europe Gülen. "The performance of star funds (the performance of products managed by fund managers with a management scale of more than 20 billion at the end of 2019) significantly outperformed the market before 2021. Tianxiang Investment Advisory Fund Evaluation Center analyzed to "China News Weekly", "The management scale of many fund managers has skyrocketed, and the market situation is better and the institutions are grouped, and there is a phenomenon of 'performance-scale' spiraling." ”
For a time, the name of the manager followed closely after the name of the company, overshadowing the fame of the fund product and being deeply bound to the theme track. Among the popular "limericks" that year, there were new energy Zhao Yi, medicine Ge Lan, liquor Zhang Kun, consumer Liu Yanchun, chip Cai Songsong, military Li Xuan, science and technology Liu Gexiang, and fund veterans such as Zhu Shaoxing, Fu Pengbo, and Li Yuanbo.
However, all this began to gradually dissipate after 2021, with the gradual collapse of the "white horse" and "track" market, the performance of public funds has been declining, and it has also ushered in two consecutive years of losses for the first time in history: in 2022, the fund industry will lose 1.45 trillion yuan, and in 2023, it will lose 434.678 billion yuan.
"I knew that the market was good, but I didn't have an awareness of why the market is good. It seems that people can never earn money beyond their own cognition, and it is not because I can make money. Chen Miao lamented that after the market changed, the "superstitious" fund manager did not work.
As of the end of 2023, there are 117 fund managers with a scale of 10 billion yuan in the market, and only Zhang Kun, Gu Lan, and Liu Yanchun are three fund managers with a scale of more than 50 billion yuan, who are managing about 65.5 billion, 57.3 billion and 53.9 billion yuan respectively, which is nearly half of the 100 billion yuan period. According to the data of Tianxiang Investment Advisory Fund Evaluation Center, the cumulative profit level of star funds has declined more seriously than its performance, "In recent years, although the performance of star fund managers has fluctuated, the average performance is not very bad, but there is little profit left for investors." The fund made a rate of return, but the people didn't make money."
Realizing this, the "pink" and "love and hate" of the people are only in an instant: the "support club" has become a zombie number, and the scolding in the fund discussion bar or social media is endless, and there are doubts about the performance of the fund manager, and it will also involve personal aspects such as his age, gender, and private life.
"Investors do need an outlet for their emotions. Li Yuan, who works in the brand department of a leading fund company, said, "Fund managers are now reducing their public appearances and using their words carefully, especially active equity managers." For the publicity materials we have prepared, if they feel that the timing is not right, they will generally refuse. Sometimes they don't even reply to messages, they don't answer phone calls, and the material can't be published. ”
With the gradual deepening of the contradiction between fund managers making money and basic people losing money, the whole industry has been reflecting for a long time. In April 2022, the China Securities Regulatory Commission issued the "Opinions on Accelerating the High-quality Development of the Public Fund Industry", which proposed that "public funds should guide fund managers to build a team-based, platform-based and integrated investment and research system" and "reverse the development model of over-reliance on 'star fund managers'".
Fund companies have also ushered in a new cycle, and even began to live a "hard life". In June 2022, AMAC issued the Guidelines for Performance Appraisal and Compensation Management of Fund Management Companies, which promoted salary restrictions such as deferred payment of performance remuneration for senior executives and self-purchase of bonuses by fund managers. In July and December 2023, the two-stage fee reduction reform of public funds will be implemented one after another, with management fees, custody fees, and transaction commissions as the core, respectively, and there will be a third phase with fund sales as the core.
"The successive regulatory regulations will put pressure on the income of fund managers. Tianxiang Investment Advisory Fund Evaluation Center said that these pressures will force the industry to optimize, integrate and innovate, and institutions that cannot adapt to this process may face elimination. According to industry insiders, some companies have already cut salaries, laid off employees, and the year-end bonus has not been paid for a long time.
In the situation of seemingly "losing more", "to be honest, neither the fund manager nor the company can be regarded as losing, and it is the people who really lose". Liu An, who works for a public offering of a securities company in Beijing, sighed.
"Star" managers, where are they going?
Why is China's mutual fund market in such a need for "star" fund managers?
"Funds are a kind of public wealth management product. The general public has limited understanding of it, and with the bull market, there are indeed fund managers with outstanding performance, and fund companies can simplify and reduce the cost of interpretation in the sales process in a 'star-making' way to promote fund sales. Wu Yanni, assistant general manager of the Owl Fund Research Institute and fund analyst, explained to China News Weekly.
"Star fund managers are like stars on the pitch, and there must be top stars in the top leagues, who will not only deliver great performances, but also attract a lot of traffic. Xi Wenchao said.
According to AMAC data, as of the end of 2022, there were 3,262 fund managers in the market. Wind data shows that in 2023, fund companies will hire 696 new fund managers, and 319 fund managers will leave.
At the low point of the market, the exodus of fund managers is tantamount to "betrayal", which tugs at the fragile nerves of the people. Taking Nuoan Cai Songsong as an example, he stepped down from 1 product under management in May and July last year, and left 3 products in December, confirming the market conjecture. As a masterpiece of its bet on semiconductor stocks, the annual returns of "Sino Growth Hybrid" from 2019 to 2023 are 95.44%, 39.10%, 22.50%, -40.04% and -3.15% respectively. Last year, there were many "pillar" fund managers who left their positions in the "clearance style", such as Heng Gao Nan, Xinhua Luan Chao, ICBC Credit Suisse Wang Xiaoling, etc.
In December 2023, AMAC issued two self-discipline rules in succession, among which the Rules for the Registration of Investment Managers of Securities and Futures Operating Institutions strengthened the requirements for the resignation and change of management of fund managers during the fundraising period, the closed period, and the management of existing established public fund products for less than one year, and restricted the resignation of fund managers at will.
In addition to Cai Songsong, other star managers were also quite controversial last year. In 2023, Gülen will step down from 2 products, and the rest of the products under management will fall by 2 to 30 percent; Liu Yanchun's 6 products will all lose, with an average decline of 2 percent; Liu Gexiang will take over the "GF Industry Strictly Selected to Hold A/C for Three Years" in 2021, and his performance has been "cut in half" since taking office; Zhao Yi, who is well-known in ABC Huili, will take charge of the first public offering product of Quanguo Fund "Quanguo Xuyuan Holding A/C for Three Years" in October 2022, raising nearly 10 billion yuan and a cumulative loss of 4.75 billion yuan in 2023.
Nowadays, regardless of whether the halo fades or not, under the pressure of public opinion and regulation, most fund managers in reality choose to be cautious and low-key. China Newsweek tried to contact a number of fund managers with more than 10 billion yuan under management, but there was little response. "I'd better concentrate on performance. One of the fund managers responded like this.
With the continuous reform of the mutual fund industry, it has become a trend for the industry to be cleared. "In the end, we will definitely have to think about this question, do we need so many fund companies and fund managers?" Liu An sighed.
Blame the fund company for being "insatiable"?
After experiencing the "cutting" with star fund managers in the early years, Qin Zi, head of the marketing department of a leading fund company, told China News Weekly, "When the fund manager is in the company, the company will tilt resources to package him, leaving only the best performing products to highlight him." Once he's gone, he's taken all the aura with him, leaving the company with a follow-up effect that lasts forever."
"The investment and research system of the big platform is perfect, there are many people, the flow is more frequent, and more attention is paid to the brand reputation that has been accumulated with great difficulty, plus there may have been historical lessons, and there is a certain immunity to the impulse to create stars. Zheng Yong, who has senior work experience in the public brand department of a bank in Beijing, pointed out that from the perspective of cost and benefit, it is easier for small and medium-sized companies to achieve a counterattack by star-making, "but because the market is extremely volatile and cyclical, it is also easy to be eaten by the star-making effect, which is a two-sided thing."
Therefore, when a product and fund manager are concerned about market opportunities or performance, fund companies need to grasp the boundary between excessive star-making and normal publicity: should they choose to build fame while it is hot and expand their scale in a short time, or continue to keep a "low profile" and consolidate long-term responsibilities?
Fund manager Fang Jin has come to such a fork in the road. At a certain stage, the annual return of the products she participated in and managed was among the best among similar funds, and the scale also increased. "When the scale grows and the market has opportunities, it is normal to cooperate with the company to do more roadshows. Fortunately, our company was not so eager for quick success, did not say that we would put all resources on one fund manager, and in the end the product size did not exceed 10 billion. Fang told China News Weekly.
On the other hand, fund managers are treated as consumables. "Sometimes, the natural enemy of a fund manager is not the capital market, but the 'insatiable' fund company. Xi Wenchao commented. Fang Jin said that there is a common "worry" from the research side, the market department, the investment side and the operation side within the fund company. "Sometimes they even direct the fund manager, why didn't you run to the top of the market as expected this month? Should you allocate these stocks? Investing relies on in-depth and objective research, pure and down-to-earth action, not mixed with selfish desires. She said.
Guided by sales and short-term performance, a large influx of market funds, superimposed by fund companies to issue new products while they are hot, has increased the number and scale of fund managers' products under management. On the one hand, fund managers are overwhelmed by the phenomenon of product listing and "one-to-many". Wind data shows that as of now, there are still 135 fund managers with more than 10 products under management.
Among the star fund managers, there are also recognized minorities in the industry. In 2005 and 2017, respectively, Zhu Shaoxing served as the A and C shares of Wells Fargo Tianhui Select Growth. Although its scale growth has also benefited from the "star-making" benefit, its performance has also been affected by the market, and it has only managed 1 fund for more than 10 years.
On the other hand, due to the "Double Ten Rule" (which means that a fund shall not hold more than 10% of the fund's assets in the same stock, and the same fund manager shall not hold more than 10% of the market value of the same stock in all funds under the management of the same fund), with the expansion of the scale, due to the restrictions on investment tools and positions, the problem of "making it difficult to turn around" has trapped tens of billions and hundreds of billions of fund managers, and sometimes they can only be "passively beaten". "It's also possible for fund managers to rest on their laurels and not pay much attention to new investment opportunities. Wu Yanni said.
Although it is an employment relationship, in order to achieve mutual success, the fund company and the fund manager need to reach a consistent pursuit of strategy and investment research philosophy. "Sometimes it's the company that wants to push the scale, so there are various routes, and there are also cases where the fund manager himself wants to improve the scale of management, after all, the scale of management represents ability, influence, and even affects his own salary. Fang Jin said.
The high-level issuance of products also led the people to build a position in the inverted pyramid, and suffered heavy losses. Speaking of this, a number of interviewees expressed to China News Weekly some "involuntarily" moments: everything is suitable for the high point, and no one cares about the low point.
"Investors can't stop when they want to buy. When your family restricts or stops subscribing, he can go and buy other products. He will say, why don't you let me buy it, what if it continues to rise later?" Qin Zi said, "The lower the point, the more no one buys it, and the product is difficult to develop, and the fund company with the pressure to declare will naturally take advantage of the high point to declare more products." Sales channels also have incentive policies for new products, and platform media promote publicity together. ”
In the eyes of the respondents, "star-making" is not done by fund companies alone, but is the result of the joint efforts of the market environment, fund companies, sales channels, Internet platforms and media, and fund investors.
"If you don't roll it, the cake will be snatched away by someone else. Qin Zi added, "The most critical point is that the market is uncertain, and even at a high level, no fund company or manager can make a conclusion to judge whether this is the highest point." ”
According to media news on January 12 this year, the regulatory authorities paid attention to the "counter-cyclical layout" of institutions in the symposium of head fund sales agencies, and required the head distribution agencies to continue to make efforts to deploy equity funds. "At present, it seems that fixed income and public REITs products are relatively easy to sell. It is still difficult to issue equity products. Qin Zi said.
"Star-making" doesn't work, and then what?
Nowadays, the entire public fund industry is facing the difficulty of low-level issuance, which brings an "embarrassing" situation to fund companies. On February 27, the announcement of the newly established China Life Security High-end Equipment Stock Initiation Fund showed that the number of effective subscriptions during the fundraising period was only 5, and a total of 10 million and 26 yuan was raised, of which the company purchased 10 million yuan and 4 employees subscribed 26 yuan.
Reflecting on the past, the phenomenon of star fund managers as the target of discussion, in essence, fund analyst Wu Yanni told China News Weekly, "It is consistent with the phenomenon of 'Bo flexibility' in the fund industry." The reason behind this is the lack of long-term investment value in the market, and the short-term game thinking of market participants is relatively heavy, and they all want to outperform others through opportunism, which is counterproductive."
According to her observation, in fund companies, the two major business lines of investment research and marketing often symbolize the long-term and short-term game, and who ultimately has the upper hand depends on the choice of management and shareholders in terms of company positioning, assessment methods and governance structure. "Some companies focus on investment research, and the investment research team does not have to cooperate with the market team to live broadcast the roadshow, and the assessment system is relatively relaxed; Wu Yanni said.
As a fund manager, Fang Jin said, "In the long run, what really affects product performance and customer experience is the investment philosophy and investment framework accumulated by the fund manager for a long time, as well as a set of scientific investment judgment methods."
The impact of the appraisal method is also reflected in the sales channel. "The channel is very strong. Qin Zi said. After the implementation of the transaction commission fee reform, the business model of "fund sales for trading commissions" and the assessment mechanism of "heavy initial offering and light holding" have been subverted in the industry for many years, and indicators such as holding volume and customer profitability ratio are being included. "Although there is also a certain amount of controversy, it is much better than chasing hot spots when assessing transaction commissions and guiding the people to buy and sell frequently to chase high. Wu Yanni commented.
Platforms are also to blame. According to Qin Zi's recollection, "In the past, Alipay would recommend and display the products with the best performance in the last year or half a year, reflecting the short-term sales orientation." At that time, the competition between Internet applications for daily activity of users also prompted fund companies to invest in content construction and live broadcast activities. "The phenomenon of inviting high-value anchors, performing talents, and even 24-hour live broadcasts has deviated from the original intention. Li Yuan said. In March 2021, AMAC issued a document prohibiting the promotion and entertainment of fund investment and education, and the above phenomenon was put to the brake in time.
"We're still thinking about whether the live broadcast format makes sense. However, now every time a fund company issues products in a centralized manner, each company is still doing it, so you must also have it. She said.
In addition to the above-mentioned external orientation, fund companies are also under pressure in terms of investor education. Liu An said that according to the background customer service hotline, it is easy for the people to ignore the risk reminder and transaction matters, and some are not even clear about the "T+1" rule, "investors like short-term trading, and it is easy to buy funds as stocks." "There are also investors who don't understand investor education. I'm here to invest, why do you want to educate me?" Qin Zi said.
A number of interviewees mentioned that at present, the signals released by the CSRC to the market have been benchmarked against overseas mature markets. "The mature net worth curve should be relatively stable in the long term, more 'close to the people', if the shock is too large, many investors look at short-term losses and easily lose confidence to cut positions and leave, resulting in losses. Fund manager Fang said.
At present, investors have many doubts about the moral hazard of active equity funds, the failure to reduce positions in bear markets, and the inability to outperform the index, and even fund researchers will question the necessity of active research. "In the long run, with the increase of market maturity, the excess return of active equity funds will gradually decrease, but it does not mean that active equity funds will not usher in better development in the future. Tianxiang Investment Advisory Fund Evaluation Center said.
"Active equity funds must have a future. Wu Yanni believes that previous research has shown that active funds can outperform broad-based indices in the long term and have low volatility, and in the cycle cycle, the market's short-term attention to ETFs and QDII has also reached a high point.
"In order to make the whole market mature in the process, reduce unnecessary volatility and protect investors, it needs to be through the joint efforts of many parties, and it may also take some time for the market. Tianxiang Investment Advisory Fund Evaluation Center suggests that, on the one hand, it is necessary to enhance information transparency, stipulate that active equity funds provide more detailed and timely disclosure of portfolio holdings, to help investors better understand the investment strategy and market positioning of the fund, especially when it comes to changes in style and strategy; on the other hand, it is necessary to encourage innovation and reduce homogeneous and short-term fund issuance; in addition, it is also necessary to promote industry self-discipline and strengthen investor education.
(Chen Miao, Li Yuan, Liu An, Qin Zi, Zheng Yong, and Fang Jin are pseudonyms in the article)
Published in the 1134th issue of China News Weekly magazine on April 1, 2024
Magazine title: Are those star fund managers okay?
Reporter: Wang Shihan