After the cost transfer of asset management, the fund company was busy with meetings, and the mini fund ushered in fission

With the stricter supervision of mini funds by the regulators, fund companies have begun to "open the knife" on their mini funds.

The Economic Observer has learned that some fund companies have held special meetings to discuss issues such as the continuous operating costs and the possibility of scale growth of their mini funds.

According to Wind Information data, there are 1,419 mini funds in the whole market, accounting for 12.19% of all 11,643 funds. At present, more than half of the mini funds are in a state of loss, and equity mini funds are the "hardest hit area" of losses.

Large fund companies have a large number of mini funds, and individual fund companies have more than 50 mini funds.

Some mini funds hold a general meeting of shareholders and plan to terminate the operation of the product. Some fund companies also said that they "can stay" for mini funds.

The fund company meets to calculate the cost

Mini funds generally refer to fund products with a net asset value of less than 50 million yuan or less than 200 holders.

Recently, the Economic Observer has learned that the regulator requires fund companies to independently bear various fixed fees such as information disclosure fees and audit fees involved in mini funds, and if fund companies do not bear the relevant costs of mini funds, they need to give solutions before the end of June this year, and change the status of the product mini or liquidate before the end of this year. The initiator fund needs to be operated for 3 years, and the scale needs to reach 200 million yuan, otherwise it is also necessary to refer to the above standards.

The Economic Observer interviewed a number of public fundraisers and learned that their companies have received notices and need to come up with solutions to mini funds based on the actual situation.

At present, some fund companies have held meetings to discuss whether it is necessary for the mini fund to continue to operate.

According to a relevant source from a fund company in Shanghai, the company organized a meeting of the fund operation department, compliance department, product department, investment research department and other departments on the issue of several of its mini funds. The operation department summarizes the cost accounting of the fund, the product department provides suggestions according to the company's product line, and the investment research department, especially the fund manager, analyzes the product performance of the investment research strategy and market conditions of the mini fund under management, and makes a comprehensive judgment on the "go and stay" of each mini fund.

A public offering person in Beijing said that the company is making corresponding solutions for mini funds, and will bear the costs for products that have the potential to become bigger, otherwise the products will enter the liquidation process.

A market participant of a fund company believes that the liquidation of mini funds or continuous marketing by fund companies requires specific analysis of specific products. But as a rule of thumb, it is relatively rare to make a mini-fund bigger through continuous marketing.

The person further said that previously, the fund company would consider keeping the "shell" of the mini fund. Now, under the new regulatory requirements, if the fund company has a large number of mini-funds, it will increase various costs. At present, all institutions are reducing costs and increasing efficiency, and it is expected that the liquidation of mini-funds will be more likely. If the mini-fund could go big, many companies would have already taken action.

For fund companies, there are many expenses for fund operation, including information disclosure fees, audit fees, general meeting fees for fund unit holders, interbank account maintenance fees, IOPV (Indicative Optimized Portfolio Value) calculation and release fees, registration fees and other fixed fees.

According to a source from the operation department of a small and medium-sized public offering institution in South China, information disclosure fees and audit fees account for the "majority" of the operating costs of fund products. Among them, according to the different scale and product type, the information disclosure fee presents a tiered charging model. Fixed income funds with a management scale of less than 50 million yuan are not charged information disclosure fees. For equity funds, no information disclosure fee will be charged for equity funds with a scale of less than 30 million yuan, and an annual information disclosure fee of 50,000 yuan for equity funds with a scale of 30 million yuan to 50 million yuan. Audit fees are also tied to size.

According to the person, after testing, the cost of funds with a scale of more than 200 million yuan is evenly spread to each fund product, and the impact on the net value is minimal. For small funds, the operating expenses of the fund will affect the net value to a certain extent. Therefore, the biggest impact of the new regulatory requirements is the stock equity mini funds with a scale of between 30 million and 50 million yuan.

Go or stay

The Economic Observer noted that after the introduction of the new regulatory policy, some mini funds took the lead and decided to convene a general meeting of holders to vote on the issue of "going and staying" the product.

On April 17, Xinhua Select Growth Theme 3-month Holding Fund under Xinhua Fund announced that it would convene a general meeting of fund share holders by means of communication, and the deliberations included a proposal on terminating the fund contract. It mentions that according to the changes in the market environment, the fund manager proposes to terminate the fund contract in accordance with the relevant regulations. The voting time of the meeting: from April 24, 2024 to 17:00 on May 19, 2024.

According to public information, the fund was established in April 2020 and its scale was 23 million yuan as of the end of last year. The fund has returned -15.41% over the past 3 years, ranking 59th out of 62 similar funds in the market.

Coincidentally, the China-Canada Fund recently issued an announcement on the convening of a general meeting of holders of its China-Canada Kerui Hybrid Fund in the form of a communication meeting, and the deliberations also included the proposal on matters related to the termination of the fund contract.

However, there are also fund companies that hold a general meeting of holders to carry out "shell" operation of their mini funds.

On April 11, Jiahe Ruijin Hybrid Fund, a subsidiary of Jiahe Fund, disclosed that it planned to convene a general meeting of holders to consider the proposal on the continuous operation of the fund. According to the proposal, the fund has been less than 50 million yuan in net asset value for 60 consecutive working days. The fund manager decided to convene a general meeting of the unitholders of the fund by means of communication to propose the continued operation of the fund.

These are just a few of the mini-funds. According to the statistics of Wind Information, as of the end of March this year, there were a total of 1,419 mini funds in the whole market. Among them, the number of equity mini funds reached 1,090, accounting for 76.81%. Among the equity mini funds, there are 450 funds with a management scale between 30 million and 50 million yuan.

Judging from the net value of the weighted units of the above more than 1,000 mini funds, a total of 799 mini funds have a net value of less than 1 yuan, accounting for more than half. Statistics on the net value of equity mini funds can be found that there are 673 products with a net value of less than 1 yuan.

Large fund companies have a more comprehensive product line layout, with a large number of funds and a relatively large number of mini funds. From the perspective of specific companies, the number of mini funds under 6 fund companies, including China Asset Management, E Fund and Bosera Fund, exceeded 30 (including 30), and the number of mini funds under 13 fund companies, including Ping An Fund, Huaan Fund and Qianhai Open Source Fund, exceeded 20 (including 20).

In the past two years, after the rapid expansion of ETFs (Exchange Traded Funds), the number of ETF mini funds has exceeded 150.

A relevant person from the above-mentioned fund company in Shanghai said that generally speaking, the number of mini funds under large institutions is large, and the fixed fees of mini funds are transferred to the company level, which will not have a great impact on the cost of institutions. However, due to the heavy amount of continuous marketing work of the product, fund companies may be more inclined to liquidate the mini-fund directly. For small fund companies, the number of products of the company itself is not large, and it is difficult for new products to enter the key product pool of sales channels, so they may comprehensively consider whether to reasonably allocate costs and energy to the continuous marketing of mini funds.

Liquidation is on the fast track

In recent years, regulators have been concerned about issues related to mini-funds, and in 2022 they put forward relevant requirements to urge institutions to come up with solutions to mini-funds, otherwise it will have an impact on the approval of new funds.

Judging from the situation learned from the Economic Observer, it is more difficult to continue to market old funds than new funds. This supervision forces fund companies to make a choice of mini funds from the perspective of fund operating expenses, which is one of the measures to promote the high-quality development of the public fund industry, and at the same time, to a certain extent, fund companies are more cautious about fund products.

In addition, in response to the problem that some companies use "help funds" and other forms to avoid paying the fees related to mini funds, the regulator has also paid attention to this kind of behavior and strictly prohibits such behavior.

This is supported by the majority of institutions. The market participants of the above-mentioned fund company said that when the market is hot, in order to catch up with the hot spots, some fund companies are not rational enough to make decisions on product layout, are unwilling to clear the mini fund, and keep issuing new products, and the latest regulatory requirements can prompt the fund company to effectively solve the problem of the mini fund.

A senior public fund evaluator believes that in the case of more than 10,000 public fund products and serious homogenization, the existence of more than 1,000 mini funds will increase the difficulty for investors to choose funds, and it is necessary for various public offering institutions to conduct a thorough combing of mini funds.

A fund manager in Shanghai admitted that due to the continuous market fluctuations, the performance of the mini fund he managed was not outstanding, and the continuous marketing could not be arranged for a long time. If the various expenses of the product are transferred to the company level in the future, the cost will increase and the scale will not go up, and the pressure on yourself will be great, which may affect the year-end assessment to a certain extent.

The above-mentioned public offering person in Beijing said that the scale of some mini funds in the market is expanding, and the industry wants to learn from it. However, only a small number of funds have such successful cases, so fund companies should carefully consider the retention of promising mini-funds. The person expects that the liquidation of the mini fund may enter the fast lane in the future.