With a loss of about 50% in 3 years, and the star fund manager fell off the altar, how should the people choose?
Every reporter: Li Lei, Song Shuang
Star fund managers are rarely mentioned anymore, and the phenomenon of relying on a single star fund manager has disappeared into history.
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 clearly stated that public funds should "abandon the phenomenon of star fund managers". This is another harsher statement by the regulator after the first announcement in 2022 to reverse the development model of over-reliance on "star fund managers".
Saying that this is the "post-star fund manager era" may not be objectionable. Those shiny names a few years ago are now mentioned on various social platforms, and the comments are often unkind and unpleasant, and few people follow these names to buy funds anymore.
Once, star and top fund managers were the core assets of a public fund. "To buy a stock is to buy a company, and to buy a fund is to choose a fund manager. In the most popular years of fund sales, I believe that many people are familiar with this sentence. In the market cycle, the contribution of a star fund manager of 10 billion or even 100 billion may be the sum of other fund managers.
At the end of 2020, Zhang Kun became the first active equity fund manager in the market with a scale of more than 100 billion yuan, Liu Yanchun and Gu Lan also soon joined the "100 billion club" camp, and the management scale of many well-known fund managers also reached its peak during this period.
But a very cruel fact is that when the market enters a downward cycle, investors find that the star effect of fund managers is not the same as the money-making effect, and everything seems to be overturned and restarted. In the three years from 2021 to 2023, the total losses of the representative works of the above-mentioned star fund managers are around 50%, and the active equity fund managers with a management scale of more than 100 billion no longer exist.
For investors, especially those who have been seriously hurt by funds in recent years, will they still choose to buy funds? In this "post-star fund manager era", where is the allocation value of public funds? Or, back to the original but core question: why do you want to buy funds, and how should you buy them?
Kimin:
Understand the difficulty of a fund manager
It is higher than understanding several industries and tracks
From the end of 2019 to the end of 2020, the number of effective accounts of public funds increased by nearly 400 million to 1.185 billion. Of these, 370,000 are institutional accounts, while the rest are individual accounts. [1] A large number of novice people poured into the market by taking advantage of the east wind of the market, and Li Yu (pseudonym) was one of them.
The explosion of scale is inseparable from the money-making effect of the fund. In 2020, the return of the active equity-based index surpassed the CSI All-Share Index by about 37 percentage points, and more than 99% of the active equity products achieved positive returns, and nearly half of the products made more than 50% of the profits (shares are calculated separately).
2020 is also the largest year for new fund issuance, with 1,243 funds established and more than 3 trillion yuan raised, surpassing the sum of the fund issuance scale in the three years from 2017 to 2019, becoming a proper "golden age" in the eyes of practitioners.
Like many novice investors, Li Yu entered the market in the world of the three "strongest kings" of consumption, technology, and medicine, and related products and fund managers have become the objects of continuous praise in the market. Every day, a large number of information about well-known fund managers is pushed to her eyes, all of whom have graduated from prestigious schools, have advanced concepts, and have outstanding performance. When he was at a loss to choose, Li Yu saw that someone had a list of fund managers with the top total returns in ten or five years.
"Okay, that's it. She quickly finalized a few products and bought them on a third-party app, which was as easy as placing an order on Taobao.
The fund bull market that began in 2020 has given birth to a group of "male gods and goddesses", who have achieved remarkable returns and amazing scale growth by betting on high-prosperity sectors and high-concentration holdings. However, when the long-term performance of core assets is not satisfactory, and the opportunity of plate rotation is not seized for various reasons, the decline in the net value of the fund and the loss of the people are actually inevitable results.
In 2021, a large-cap growth fund held by Li Yu fell by nearly 40% in a few months. When she was struggling with whether to "cut the meat", the fund officially announced the change of fund manager, and Li Yu finally made up her mind to clear her position.
When choosing specific fund products, Mingchen has its own set of methodology. For example, at the macro level, he will consider multiple factors such as market risk appetite, industry supply and demand pattern, and macroeconomy, while at the trading level, he will consider the balance of his positions, and compare the odds and win rates.
He said frankly: "I think it is more difficult to understand a fund manager than to understand several industries and tracks. ”
In recent years, the weakening of the money-making effect of funds has made Mingchen think more about products such as public funds. In his view, on the one hand, the interests of fund companies and the people are not completely consistent, and there is no risk sharing; on the other hand, in terms of information communication, investors cannot understand the underlying logic of holding positions from active funds, "don't worry, it's better to speculate on stocks yourself."
Because of this, Mingchen has turned to ETFs since last year, and has replaced the analysis of active equity funds in the past by studying the compilation rules, heavy industries, and valuation of the corresponding indexes of ETF products. "The rules of compilation come first, and that's the most important thing. He repeatedly stressed.
Li Yu has been buying bond funds since last year, and she laughed that this is the psychology of "risk aversion and pursuit of capital preservation after risk education", and it is also the advancement of a novice citizen.
"The bond fund rate cut cycle is actually doing well. The income level of this type of product, regular reports and the judgment of some industry experts on the bond market are several important bases for my choice. ”
Public Offering:
Fixed income and ETFs are the most popular
It has begun to lay out active equity products
Xiao Liu is an employee of the marketing department of a medium-sized fund company in Shanghai. A considerable part of the public offering management scale of the institution he works for relies on a well-known fund manager in the whole market, but it is precisely because of the influence of this model that when the fund manager's performance declines, the company is inevitably under great pressure from investors and public opinion.
In fact, since a few years ago, this institution has begun to consciously push the investment research team to the market as a whole, hoping to weaken the influence and traces of star fund managers by "walking on multiple legs". But over the years, the fund manager's name has become closely associated with the company. Many times, the efforts of Xiao Liu and his teammates are more like throwing stones into the sea.
Like Xiao Liu, Xiao He, who works in another head fund company, has also changed his focus in the past two years, but mainly from active equity products to fixed income products represented by bond funds, "Equity funds really can't be sold, and they don't need so much publicity, but our company has issued a lot of bonds in the past two years, and the performance is not bad."
These two types of products seem to naturally do not need to package and highlight a certain fund manager like active equity products. On the contrary, ETFs closely follow the market or industry trends, as the so-called "choose the right category, get twice the result with half the effort", focusing on the industry or product itself is the meaning of the topic, while bond funds, especially the short- and medium-term bond funds that were popular some time ago, pay more attention to the level of drawdown and risk control, and have always been based on the team and the overall investment and research strength as the selling point.
Unlike the people who often say that they "will not buy active equity products anymore", many of the public fundraisers interviewed said that they will definitely buy equity products when the market improves, and some have begun to actively layout.
Investment Options:
Mutual funds have many outstanding advantages
It's not easy to "lie down and win".
As a portfolio of basket stocks, public funds have many outstanding advantages, which boil down to a few points.
First, portfolio investment and risk diversification, secondly, standardization, transparency and strict supervision; third, low investment threshold and good liquidity; fourth, there are professional fund managers to manage products.
In fact, the characteristics of the fund have never changed, but in the past few years, many people have projected the advantages of "collective financial management and professional management" of public funds on some fund managers, but they have little understanding of the product itself and the team, investment strategy and ideas behind the fund manager. In other words, all the homework that Kimin should do is given to an image and symbol.
But in the matter of investment, there is no laziness at all, how easy is it to "lie down and win"?
Just like in the above example, when most of the people are losing money, Mingchen can make money on the fund. As a retail investor, there is nothing special about his access to information, but he will think about and identify this information to form his own judgment criteria.
"Taking equity funds as an example, as of February 29, 2024, looking at their rolling period performance, the average net value performance in the past 1 year, the past 3 years, the past 5 years, and the past 10 years under a total of 4 statistical items are: -20.21%, -25.84%, 60.21%, and 231.42% respectively. Of the 4 data, the first 2 are not good, and the last 2 are getting better and better, which shows that: first, the trend of the underlying market has a great impact on the net value of the fund; second, as a professional player, the excess returns created by the fund manager will accumulate more and more with the continuation of time. ”
For investors, there is also a very important background that the product structure of the market is also changing and adjusting. Active equity funds, including common equity funds and hybrid funds, are shrinking at a rate that is visible to the naked eye, while bond funds and passive index funds have maintained their growth momentum.
This information should not be ignored by the people.
Core Analysis:
How do I buy a fund?
In the face of changes in the external environment and the adjustment of internal concepts, how should you choose a fund product that is suitable for you?
First, buy more bonds and less stocks
After reading too many stories of losing money, for small and medium-sized investors, the allocation can be simple and crude: no matter whether your risk tolerance is high or low as you think, "buy more bonds and less stocks", this is the first step to maintain and increase the value through fund investment.
The answer is also very simple, we are all ordinary investors, without the support of a professional investment research team, and there is no strict risk control system, if you want to "increase value", you must first "maintain value".
Taking 10,000 steps back, even if it is a practitioner, what are other people in the fund company buying? That's what the reporter wants to talk about.
The second point is that the combination of "short-term bond fund + index fund" is better
As mentioned above, many "smart" fund companies now focus on the development of two businesses, one is fixed income and the other is index. On the one hand, both businesses can bring them a considerable scale. On the other hand, these two types of products themselves are also very clear, easy to tell a clear story and make people understand, especially index funds, which can basically minimize the uncertainty of the fund manager's personal factors.
Following this idea layout, first of all, we will select a wide range of bond funds and stock funds.
There are many types of bond funds, and short-term bond funds are relatively best suited for everyone. The so-called short-term bond fund does not hold stocks, and it holds bonds for no more than one year, and the volatility is smaller than that of bond funds that invest in long-term bonds and stocks, and the income is more stable and guaranteed. For example, in 2023, short-term bond funds will make money as a whole, and the income of short-term bond funds in recent years can also refer to the above CSI short-term bond index, which is basically "stable happiness".
As for stock funds, choosing index funds is more worry-free and effort-saving, and there is no need to worry that the fund manager will randomly adjust positions and damage returns when the market fluctuates. If you think that you have a good understanding of the ups and downs of the A-share market, and you also have a more in-depth study of the industry, then you can choose the corresponding thematic index fund; if you don't know, then you can directly choose a broad base, such as CSI 300, SSE 50, etc., to save worry and effort.
Third, since the combination of "short-term bond fund + index fund" has been decided, how should these two types of products be chosen?
Let's start with index funds. If you want to buy index funds, it is recommended that you go to a brokerage firm to open an account and trade ETFs against all odds. For the same product, generally speaking, it is enough to choose according to the large scale.
If you choose the form of over-the-counter funds to buy funds, it is basically equivalent to "dead longs", in addition to making up positions, selling at a loss is "cutting meat", there is no price difference to do, which is not suitable for such a fluctuating market of A-shares. ETFs, on the other hand, can be traded in real-time, which is completely different and has low fees. The management fee rate of exchange-traded ETFs is generally around 0.50%+0.10%, and the lowest fund fee rate can reach 0.15%+0.05%, which is only one-third of the regular fund fee.
Let's talk about short-term bond funds. There is also not much difference between the different types of short-term bond funds. This may have to take a brief look at the past performance, whether there is a sudden plunge one day, stepping on thunder, if not, the scale is acceptable (such as billions), the net value is a relatively perfect 45-degree upward slash, and it is not a product of an unknown institution that has never heard of it, and the basic problem is not big.
Fourth, in terms of investment objectives, you can refer to the advice of Jia Zhi, managing director of the asset management division of Hualin Securities:
If the investment target is an annualized return of 2%~3%, money market funds or pure bond funds can meet the demand; if the investment income is increased to an annualized rate of 5%, it is necessary to complete the allocation of 20%~30% of equity products; if the investment income wants to reach an annualized rate of 10% or more, the equity assets should also be increased accordingly, or even all of them.
Finally, if there are investors who are very optimistic about equity products and have to buy some popular active products?
It's not impossible, but there's a suggestion to buy in batches.
In any market situation, no matter how bullish you are about a fund, don't go all in. If you want to buy 100,000 yuan, you can buy 20,000 yuan or 30,000 yuan every month and buy it in batches.
Of course, there is another method that fund companies once admired, that is, regular investment. Through long-term unremitting regular investment, we have smoothed out the losses caused by the operation of some markets and fund managers, and have rebounded. Although the market has been sluggish for a long time, the return on investment is also very slow, but it is definitely better than passively waiting for a rebound with a full position.
Reporter|Li Lei, Song Shuang
Edited by Yi Qijiang
Vision|Zou Li
Typesetting|Yi Qijiang
When buying a fund is no longer buying a fund manager, it's time for investors to think differently
Saying that this is the "post-star fund manager era", I don't think anyone will have any objections. Those shiny names a few years ago are now mentioned on various social platforms, and the comments are often unkind and unpleasant, and few people follow these names to buy funds anymore.
However, due to the impact of the previous "buying a fund is buying a fund manager", once this important reference dimension is lost, and the market situation and structure have also changed, a vacuum area has emerged: in such a new stage, how should investors buy funds?
This is also the core question that this article will address.
In order to clarify this problem, the author has conducted in-depth exchanges with a number of people, public fund practitioners, fund company executives, fund sales agencies, third-party researchers, etc., in an attempt to find practical solutions.
First of all, are you still buying funds? The answer is yes. It is divided into two parts, one is in the previous bull market, by the active equity funds hurt by this part of the investors, many turned to more stable fixed income products, such as bond base; the other part will still choose a certain volatility, but not the fund manager actively managed products, this is a typical representative of ETFs, such as broad-based index ETFs or industry theme ETFs, etc., these are trends worth paying attention to.
In fact, the characteristics and advantages of funds have never changed, but many people have not bought such products and lost money because they don't know enough about them, which will lead to greater cognitive errors. Concept and cognition are the foundation, professional investors do not buy products they don't understand, and the money of ordinary people is their hard-won real money, so they should be more cautious.
Finally, since we are still buying funds, how should we buy them? We have also interviewed a large number of experts on this issue, combined with their professional views, the author directly gave a few practical and practical suggestions for ordinary people, hoping to really help investors;
References for this article:
[1] According to AMAC's Annual Report on China's Securities Investment Fund Industry (2021)
National Business Daily