Since the high point in 2021, public active equity funds have suffered continuous losses, and indicators such as scale and proportion of A-share holdings have fallen. Based on this, the fund industry has recently set off a round of discussion on "active equity changes". Public offering executives, fund managers and other parties participated.
As the "drama people" in the fund industry, they admit that after the collapse of the group in 2021, public active equity investment has not yet found a breakthrough for re-emergence, and it is difficult to become a marginal pricing fund in the market. From the evolution of public heavy stocks over the years, they found that even though heavy stocks have undergone the rotation of cyclical stocks, financial stocks, technology stocks, consumer stocks, etc., due to the lag in the cognition of industrial laws, there is a phenomenon of "the industrial trend has passed, but the position adjustment is not timely". Under the trend of high-quality development and "de-staring", where is the way out for the reform of active equity investment?
It is difficult to become a marginal pricing fund in the market
Liang Hao, vice president of Penghua Fund, is the first person to publicly reflect on public active equity investment in recent years. At the 2024 Spring Investment Strategy Conference of Penghua Fund, he bluntly said that the public active equity investment is not well prepared to respond to the new changes in the investment environment and investment scope, and it is reflected in the overall scale, value and growth investment.
Liang Hao specifically talked about three points, one is that the scale of active equity funds and the proportion of free float market value held by them will continue to decline after the industry high point in 2021, and it is difficult to become marginal pricing funds in the market; second, the track-type investments (such as liquor and new energy) that were sought after by the market in the past have fallen one after another; third, after the bubble burst of the mobile Internet wave in 2015, public growth investments are mainly fundamental and value-oriented, and a large number of public funds are difficult to adapt to when thematic and conceptual investment opportunities appear.
According to the data, by the end of 2023, the scale of active equity funds (including QDII active equity) reached 4.3 trillion yuan, and the scale once reached 6.88 trillion yuan at the high level in 2021. In addition, as of the end of 2023, public funds held a circulating market value of 5.1 trillion yuan of A-shares, accounting for 7.3% of the shares, which was 7.58% and 8.31% at the end of 2020 and September 2021, respectively, and approached 28% earlier. At the same time, as of the end of 2023, public active equity funds have suffered substantial profit losses for two consecutive years, with profit losses of 1,285.579 billion yuan and 670.935 billion yuan in 2022 and 2023, respectively.
"Judging from the situation from 2020 to the present, the mainstream investment in the track is problematic. An active equity fund manager in a public offering believes that new energy is a strong cyclical industry, but in the past investment, some fund managers did not adjust their positions at a high market level.
Compared with 2014 10 years ago, as of the end of 2023, the top ten heavy stocks of public funds have all been replaced, and Ping An, which has been the first heavy stock in public offering for five consecutive years, has disappeared, but the large number of blue-chip value targets still accounts for a relatively heavy weight. According to the statistics of Wells Fargo Fund, as of the end of 2023, the proportion of public funds in electronics, medicine, food and beverage, and power equipment is in the top four, accounting for 46.54% in total, which is the "ballast stone" of public funds.
There is a "free ride" phenomenon in the top 10 heavy stocks
The idea of extending from the overall proportion to specific heavy stocks reflects the basic tone of industry insiders on the current situation of public active equity investment: keeping up with the direction of the times, but failing to highlight the cutting-edge trends. The above-mentioned fund managers believe that the changes in heavy stocks mainly reflect the investment level of the fund from two aspects: first, in the mining of excess return stocks, heavy stocks (in the past or present) are the main contributor to investment returns;
Wei Fengchun, chief economist of Chuangjin Hexin Fund, said that the investment research team of the fund company focuses on the research industries and companies, which is reflected in the top ten heavy stocks in terms of investment, behind which is their understanding of the macro and industrial operation laws over a long period of time, which can roughly reflect the overall level of active equity investment. "Judging from the past 20 years of public fund holdings, the top ten heavy positions have experienced rotation between cyclical stocks, financial stocks, technology stocks, and consumer stocks. It shows the allocation ability of the fund company, but it does not reflect enough of the timing ability. Wei Fengchun said.
Wei Fengchun observed that due to the time difference in the cognition of industrial laws, there is a "free ride" phenomenon among the top ten heavy stocks among different companies. Because of the wealth effect brought about by the increase in short-term capital attention, there is an agglomeration effect of the overall allocation of public funds, and it is inevitable that there will be a phenomenon of "the industry trend has passed, but the position adjustment is not timely". Liang Hao also said that in the environment of great industrial changes, there are many theme concepts, and it is very difficult for public offering to invest in active growth, and the superimposed investment method based on macro prosperity may fail in stages.
"After the collapse of the huddle in 2021, public equity funds have not found a breakthrough for their re-emergence, and the main reason behind it is that the leading industries are not yet clear and there is no clear investment line. Wei Fengchun believes that real estate is confirmed to be at the bottom of the cycle, although it is still important, but it is no longer considered by the market to be a leading industry, and the top ten heavy positions will not take this as a position. New energy and liquor have experienced great ups and downs, and there are also big flaws in terms of investment value. The strategic and tactical values of the digital economy and artificial intelligence cannot be unified in the short term, and it is difficult to quickly become a breakthrough.
So, under the trend of "de-staring", where is the direction of reform of public active equity investment?
Transition from individualization to industrialization
In this round of reflection, industry insiders gave all-round suggestions from the whole to the part. In terms of macro trends, Dou Yuming, chairman of CEIBS, said that in the past, the proportion of public equity investment was relatively high, and now the demand for fixed income and multi-asset investment is also growing rapidly. He believes that the improvement of investment and research capabilities of asset management companies may face three stages: one is to emphasize individual capabilities, the second is to emphasize team capabilities (i.e., the industrialization stage), and the third is to digitally intelligent and human-machine integration stages. "At present, the fund industry is going through a stage of transformation from individualization to industrialization. At this stage, the reform of public fund investment and research is to do a good job in internal coordination, professional division of labor, and teamwork, and rely more on the platform rather than individual strength to make the long-term performance more stable and predictable. ”
The above-mentioned fund manager said that active equity investment should ultimately bring good returns to investors, which is fully compatible with the fund industry, fund companies, and fund managers' interest maximization. In the short term, it may be difficult to change the profit model of fund companies, but it is necessary to encourage and manage diversified investments through effective mechanisms, including high dividends, pro-cyclical/counter-cyclical, etc., and further dilute the scale in the fund evaluation process to increase the proportion of performance in the medium and long-term dimensions.
It should be pointed out that, unlike in the past, there are also views in this round of reflection that include the behavior of the people in the reform of equity investment. Wei Fengchun said that in the past three years, the equity market has continued to adjust, and the people are more inclined to pursue absolute returns as the goal, which is a certain gap with the pursuit of relative returns by stock-biased products. To this end, fund companies also need to continue to strengthen investor education, so that the people can clearly understand the risk-return characteristics of stock-biased funds, and purchase stock-biased funds from the perspective of long-term investment and asset allocation.
There are also public investment advisers who believe that in the eyes of a considerable number of investors, fund managers are a group of stock speculators, and buying funds is to let them speculate on stocks for you, which is a one-sided appearance. "Up to now, the variety of fund products has been greatly enriched, from simple products such as partial equity or partial debt to multi-strategy, commodities, dividend undervaluation, and even MOM, REITs and other products. Under the great abundance of the supply side, the diversified investment and asset allocation concepts on the demand side must also keep up. ”
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