Text | Liu Zhentao
There are fund products that fail to be issued in the public market!
On April 27, ABC Credit Management Fund Management Co., Ltd. (hereinafter referred to as "ABC Fund") issued an announcement on the invalidity of the fund contract of ABC Credit Management MSCI China A Climate Change Index Securities Investment Fund (hereinafter referred to as "ABC Credit Management MSCI China A Climate Change Index"). According to the announcement, the fund issuance failed because the fund failed to meet the effective conditions agreed in the fund contract.
According to the fund contract, two conditions need to be met for the successful issuance of the fund: the funds raised during the fundraising period shall not be less than 200 million yuan and the number of fund share holders shall not be less than 200.
Judging from the funds that failed to be issued in the past, almost all of them did not raise 200 million yuan during the fundraising period. It is very likely that the MSCI China A-share Climate Change Index Fund has not raised 200 million yuan.
According to the data, ABC Credit & Investment MSCI China A-share Climate Change Index Fund was approved by the regulatory authorities on November 7, 2022. ABC Fund will start issuing the product on February 1, 2024, and the issuance and fundraising date will be from February 1 to April 30, 2024, and the fund manager will be the veteran Song Yongan.
On April 13, 2024, ABC Fund issued an announcement on the adjustment of the fundraising period of ABC Credit Management MSCI China A-share Climate Change Index Fund. According to the announcement, the fund's fundraising deadline has been adjusted, and the fundraising deadline has been adjusted to April 26, which is 4 days earlier than originally scheduled.
Wind data shows that as of April 29, 2024, since 2024, there have only been 2 products that have failed to be issued in the public market, and the ABC MSCI China A-share Climate Change Index is the second product in the market to fail to issue and the first index product to fail in the year.
Since 2024, the issuance of index products in the public market has been relatively hot. Wind data shows that as of April 29, 2024, there have been 170 public index products (including passive index funds, passive index bond funds, index enhanced funds, and ETFs) that have been launched since 2024. From the perspective of subscription days, among the products that have closed for subscription, 16 have completed the fundraising after only one day of subscription.
Why did the issuance of ABC Credit & Investment MSCI China A-Share Climate Change Index fail when the issuance of index products was relatively hot?
On the one hand, it may be related to the index target tracked by the fund product.
According to the data, the index subject tracked by ABC Huili MSCI China A Climate Change Index is "MSCI China A Climate Change Index". The index was launched by MSCI in August 2020 to measure the opportunities and risks associated with the transition to a low-carbon economy, enabling institutional investors and wealth managers to incorporate climate risk considerations into their investment processes.
This index is an unpopular index, and although the index has been released, there are very few products that track this index. According to the approval progress announced by the regulatory authorities, only two public offering companies have applied for products tracking the MSCI China A-share Climate Change Index, one is ABC Fund and the other is Huabao Fund.
Judging from the results, the product declared by ABC Fund has failed to issue the ABC Credit Management MSCI China A-share Climate Change Index, and there is no new progress in the product declared by Huabao Fund.
According to media reports, some people in the market said that the popularity of public offering products tracking is not high in the niche and unpopular theme index. On the one hand, the recognition is not high, and on the other hand, the constituent stocks involved in the index are also involved in other highly recognizable thematic indexes, and investors' enthusiasm for new and unpopular is not high.
Combing through the issuance situation found that those index products that were sold out in one day or in advance were almost all products that tracked highly recognizable indices. For example, for products tracking the CSI A50 Index, the products issued by many public offering companies have been sold out in advance. The Dacheng CSI A50 ETF issued by Dacheng Fund sold 2 billion shares in 10 days.
On the other hand, ABC Fund has insufficient competitive advantage in the field of index products.
From the perspective of products, as of the end of March 31, 2024, there are only 5 index products under ABC Fund (multiple shares are combined), and there is no ETF product under it, and the scale of index products is only 1.898 billion yuan.
According to the data of Tiantian Fund Network, at the end of March 31, 2024, the total scale of public offering and management of ABC Fund was 168.195 billion yuan, and index products accounted for only 1.13%.
Observing the changes in the index products of ABC Fund, from the end of 2019 to the first quarter of 2021, the index products of ABC Fund exceeded 10 billion yuan. Starting from the second quarter of 2021, the scale of ABC Fund's index products began to decline, all the way to less than 2 billion yuan by the end of the first quarter of 2024.
In the past two years, many companies in the public offering market have used index products, especially ETF products, to improve their scale, such as Huatai Pineapple Fund, which relies on the growth of ETF products and the total management scale has increased significantly. However, ABC Fund has very few index products.
In addition to the lack of index products, ABC Fund does not have many index product talents. According to the data, ABC Fund currently has 24 fund managers, while there is only one veteran Song Yongan, a full-time fund manager who manages index products.
Song Yongan has been a fund manager at ABC Fund for 11 years and currently manages 4 equity index products under ABC Fund. Another bond index product is managed by fixed income fund manager Guo Zhenyu.
Among the 4 products managed by Song Yongan, Song Yongan will take the lead in issuing the ABC CSI 1000 Index Enhanced Product in 2023, which has been in operation for less than one year, and announced in December 2023 that it is facing the risk of liquidation.
As of the end of the first quarter of 2024, the fund's net asset value was 47 million yuan, less than 50 million yuan, and it may still face the risk of liquidation.
Looking at the reserve products of ABC Fund, there are currently no index products, all of which are bond and hybrid.
From this point of view, due to the shortage of talents for its own index products, ABC Fund is relatively weak in the layout of index products. While other fund companies are scrambling to increase their scale, ABC Fund has missed the opportunity.
For ABC Fund, it needs to attract index product management talents in the later stage to improve its layout in the field of index products, so as to enhance the company's development.
What do you think about the failure of the issuance of ABC Fund's index products?