Charlie Munger once said, "If you're going to be a good investor, you have to keep learning." In the process of continuous learning, the situation is changing, and so are our investments. ”
This sentence applies to both Noah and Peng Jing.
Peng Jing is currently the Chief Product Officer of Noah and the Executive Deputy General Manager of Gopher Asset Management. As early as her student days, Peng Jing clarified her career goals and set a plan for herself to engage in the financial industry. After graduating with a master's degree in economics in 2007, Peng Jing joined Noah.
Peng Jing, who has been working in Noah for more than ten years, has witnessed a series of changes in noah and Gopher in the company's philosophy and product design: from product-driven to customer demand-driven, from non-standardization to standardization, from FOF to MOM to multi-strategy products... In the rapidly changing financial market, only continuous learning and iteration can maintain vitality.
In Peng Jing's view, noah's most attractive thing about her is that learning to grow very fast. "One year in Noah is equivalent to a few years outside," Ms. Peng said.
Peng Jing has nearly 15 years of experience in the industry, she is responsible for the research and development and design of Noah Group's financial products, and has accumulated thousands of products with hundreds of billions of scales for Noah's high-net-worth customers. In terms of product innovation, a number of products are the first in the industry, such as the first corporate stock equity pledge trust, the first art investment fund, the first restricted stock pledge trust plan, and the first real estate fund managed by a professional developer.
The market is always changing, there is no eternal winning army, and it is always necessary to face investment problems. Looking back over the past decade, the performance of various strategies in the secondary market has been obviously different, and it is difficult for a single strategy to cross the market cycle. At the beginning of March, Gopher Asset Management, an asset management company under Noah Holdings, launched a series of targeted strategy products.
This is a secondary market multi-strategy portfolio investment method, the underlying asset is a combination of various managers and strategic tools, according to the investor's target constraints, screening managers, selecting products for multi-strategy portfolio configuration, in order to achieve investment objectives.
As one of the product designers, Peng Jing repeatedly mentioned the "customer's bottom warehouse configuration needs" in the interview. She believes that in the past, the customer's bottom position configuration was non-standard fixed income, and now the market is in the case of non-standard transfer, and the more stable bottom position allocation demand still exists.
"Many customers with a lot of wealth don't want their wealth to fluctuate particularly much, so they need to configure the product of the bottom position." For example, invest some money every year, hoping to have a certain bottom position income every year, so that it is enough to meet daily expenses. Peng Jing said.
"The part that changes is the product structure and the perception of risk, and what remains unchanged is the common sense and essence of finance."
"The era of product drive has slowly passed, and now they are all standardized assets, the homogeneity of products is getting stronger and stronger, and designers must start from the customer's point of view."
"If you look at the time longer, it is difficult to choose the time, and the return on the timing is not necessarily higher than the return that has been held."
"Investment research drive and investment performance drive are the most fundamental contents of asset management companies."
"The target strategy pursues not particularly high returns, but relatively low volatility of long-term sustained returns, so it is necessary to control the volatility of the product, and the volatility should be controlled through low correlation and multi-strategy."
<h1 class="pgc-h-arrow-right" data-track="39" > non-standard transcoding:</h1>
<h1 class="pgc-h-arrow-right" data-track="40" > change is the product structure, and what does not change is the essence of finance</h1>
Q: You have been in the industry for many years, and the market cycle has changed many times. Has there been any change in your philosophy of designing financial products?
Peng Jing: There are some big changes in our product design concept, and there are also some unchanged places. The part of the change is the structure of the product, as well as our understanding of the risks of various products, what remains unchanged is the common sense and essence of finance, and there are also great changes in the form of product expression.
From 2005 to 2007, 90% of our products were securities market products; by 2008, we had done a lot of government-related projects; in the years since 2009, we have done a lot of trusts; in 2010, Gopher Assets was established, and then the product line has become more abundant.
We have done product innovation in many areas, such as the first real estate fund, umbrella trust, art fund, film fund and so on. In 2008, we were the first in the market to do private equity funds, namely PE/VC funds.
We also have more macro research at home and abroad, and will adjust and innovate products from top to bottom according to changes in the macro market.
Since 2019, we have taken the initiative to reduce the stock of non-standard products to zero, and there has been no new additions. Since last year, all new products have been standardized assets, including equities, bonds, and some traditional alternative assets, mainly primary market private equity funds.
<h1 class="pgc-h-arrow-right" data-track="185" > from product-driven to customer-demand-driven</h1>
<h1 class="pgc-h-arrow-right" data-track="186" > empathize from the customer's point of view</h1>
Q: After designing so many products, what do you think are the biggest difficulties in the process? For example, in recent years, non-standard transcoding, if the customer does not follow, what to do?
Peng Jing: It is easier to answer the question of non-standard transfer from the perspective of product design. When we make standardized products, we look at the industry from top to bottom, select the underlying assets, and design the product structure by ourselves.
Previously, Noah was product-oriented to drive the development of wealth management business. Since 2019, the market has been changing, the concept of customers has continued to mature, and investor education has been ongoing. We will put our customers' shoes on their shoes and think about their goals.
We will also repeatedly communicate with customers, exchange views, introduce investment strategies, after all, many investors come from various industries, and their understanding of finance needs time to slowly deepen.
Deep insight into customer needs is a very big shift in Noah's thinking this year. We used to be product-driven, but now we're driven by customer demand.
In the past, Noah did have certain advantages in product innovation and design. Now the era of product drive has slowly passed, because now they are standardized assets, the homogeneity of products is getting stronger and stronger, and designers must start from the perspective of customers, deeply understand customers and understand their needs.
<h1 class="pgc-h-arrow-right" data-track="187" > products that high net worth customers need to meet the bottom position configuration</h1>
Q: Financial products are not the same as other products, and the degree of standardization and reproducibility is relatively strong. How does the target strategy make it unique?
Peng Jing: Gopher's target strategy product was pushed out after more than half a year of polishing by the team, and it is a multi-strategy team version 3.0 product. The first version 1.0 was a secondary market FOF fund, which was started 8 years ago.
Later, we noticed some flaws in the FOF fund - the fund is managed by someone else, and there will be some restrictions on wanting to adjust the position. So when the product was upgraded to version 2.0 four or five years ago, most of the underlying assets of the product were THE STRUCTURE OF THE MOM.
The MOM structure means that the investment operation is traded on the platform of Gopher, so that we can see very clearly the change of the fund manager's bottom position, encounter market changes, and want to redeem or adjust the position in time can be completed in the first time.
The reason why the target strategy this time is version 3.0 is also related to "customer demand-centric". In the past, the customer's bottom position configuration was non-standard fixed income, and now there are no non-standard products, but the customer's bottom position configuration requirements still exist.
Many customers with a lot of wealth do not want their wealth to fluctuate particularly much, and they need to lay the product configuration of the bottom position. For example, invest some funds regularly, hoping to have a certain bottom position income every year, so that it is enough to meet daily expenses. For high-net-worth customers, the bottom position allocation products that can have some dividends every year are the objective needs of customers.
Back to the product investment strategy, how to meet customer needs? Our previous 1.0 and 2.0 versions actually only met part of the needs of customers, and the revenue of the product may be relatively high, but the fluctuations will be relatively large.
In terms of the 3.0 version of the product, we first study and analyze the market situation from top to bottom, and then decide on asset allocation. There are many types of assets allocated, including offensive stock multi-strategy, stable bond-type strategy, and tail risk strategies such as CTA and macro hedging.
Through top-down asset allocation and bottom-up selection of managers, in a period of no less than 3 years, we hope that the annualized rate of return of the product can reach the target return of each product type.
<h1 class="pgc-h-arrow-right" data-track="188" > upgraded based on FOF and MOM</h1>
<h1 class="pgc-h-arrow-right" data-track="189" > multi-strategy is a conceptual innovation of asset management products</h1>
Q: You mentioned the shift from FOF to MOM, and the definition of the target strategy description is "a combination of manager and policy tools", is it a product that combines MOM and FOF?
Peng Jing: First of all, the 2.0 MOM is based on the 1.0 FOF upgrade, and the target strategy of 3.0 is based on the 2.0 MOM upgrade, so the multi-strategy and THE MOM are very different.
For example, in the past MOM products, the performance benchmark was the CSI 500 or CSI 300. Our internal requirement for multi-strategy products is to achieve a dividend threshold for returns.
Target Strategy 3.0 hopes to achieve absolute returns, if the stock does not rise this year, but we have configured other kinds of strategies, such as "fixed income +", CTA, macro hedging, etc., there may be a good excess return.
So we will first have a top-down judgment on the market, based on the market judgment and then choose the right strategy, and finally hope to achieve, even if the stock market is falling this year, but through the top-down macro judgment and multi-strategy combination of allocation, we also have to strive for positive returns for the product. Therefore, the difference between the target strategy 3.0 and the previous 1.0 and 2.0 is still very large.
Multi-strategy belongs to the concept of asset management products, and the requirements for investment capabilities are relatively high. Gopher began to set up an investment research team last year, and now there are 40 or 50 people in investment research, and our investment research team belongs to the buyer's investment research team and is directly serving the investment.
For example, the target strategy needs to have a basic judgment on the macro market, so that when allocating large assets, the proportion of offensive positions, stable positions, tail hedging positions and other strategies can be considered. In this regard, the investment research team will hold a strategy seminar and a monthly investment decision meeting every week to repeatedly discuss the effectiveness of the strategy. If there is some change in the market, it is also necessary to hold some temporary investment policy meetings. Investment and research are closely integrated to ensure the effective operation of the target strategy series of products.
<h1 class="pgc-h-arrow-right" data-track="190" > multi-strategy combination that strives to achieve investment goals</h1>
Q: What is the meaning of the name "Target Strategy"?
Jing Peng: We hope that the target strategy is really from the customer's point of view. The naming of the product actually reflects whether the designer thinks from the customer's point of view, which is why our product naming should be more standardized and rigorous.
Why is it called a target strategy? First of all, we hope that when we put the time into a longer-term dimension, we expect that the product can achieve a certain investment goal on average every year. At the same time, it is also an investment product of multi-strategy portfolio. Combining the above two points, we named the target strategy series of products.
Q: Why did you choose to roll out your target strategy at this point in time? What is the background of the rollout of the target strategy?
Peng Jing: In the past two years, the market has begun to transfer from non-standard, and we believe that both wealth management and asset management should return to the real needs of customers, and customers ultimately need to have a relatively stable bottom position allocation. We do not recommend customers to do a single non-standard product, because the risk is very large, is the relationship between 0 and 1.
So we think: if we don't allocate a single non-standard product to the customer, what other products can meet the customer's bottom position allocation needs?
We have been exploring and discussing for nearly a year, and after a long period of repeated polishing, we believe that the products invested in multi-strategy portfolios can meet the customer's bottom position allocation needs, which is the background of the launch of the target strategy.
<h1 class="pgc-h-arrow-right" data-track="191" > controls volatility through low-correlation, multi-strategy portfolio investments</h1>
Q: What is the investment philosophy of the target strategy? Please elaborate on "low-correlation multi-asset, multi-strategy".
Peng Jing: We need to have a low correlation of multiple assets, multi-strategy, mainly around the investment objectives, because any single type of asset in different markets, the performance is very different. For example, last year's stock market performed particularly well, and this year's stock market is difficult to do, but some CTA strategies have performed better this year.
Multi-strategy products to meet the customer's bottom position allocation, it is best to hope that there will be absolute returns every year, so this requires a richer and more diversified asset class in the underlying allocation. For example, if a product is only matched with stock bulls, it may lose money in the case of a bad market. The target strategy will study the macro market from the top down, while studying this year's asset allocation in the macro context.
At the same time, to achieve investment goals, to reduce volatility must be allocated a low correlation strategy, so last year when the stock market was particularly good, we did not particularly pursue high returns. If the stock market is not good, other strategies can also achieve investment goals if they do well.
Because it is a bottom position configuration product, we do not want it to fluctuate very high. If the volatility is high, customers may as well buy stocks or equity funds. In fact, if you buy stocks and funds, as long as you hold them for a long enough time, the income is also OK, of course, the premise is to choose an excellent manager.
The target strategy pursues not particularly high returns, but relatively low volatility of long-term sustained returns, while controlling the volatility of the product, and volatility is controlled through low correlation and multi-strategy.
<h1 class="pgc-h-arrow-right" data-track="192" > not necessarily have a high yield when choosing</h1>
Q: How does the target strategy achieve product fluctuations and risk budgets within the constraints? How do you develop different policies based on different target constraints?
Peng Jing: This is a very important point in the product structure.
First of all, how to control the risk budget is also a return to the product characteristics - the low-correlation, multi-strategy product of the underlying configuration is actually to manage risk through the underlying asset allocation.
Second, you need to have a rough judgment on the market, for example, when the market fluctuates this year, the stock position will come down, if it is a multi-type stock fund or a manager's product, in fact, it will not do too much timing. Looking at the time extension, timing is difficult to do, and the return on timing is not necessarily higher than the return that has been held.
Manage overall risk through judgment of macro trends across the market and through the allocation of low correlations across types of assets.
<h1 class="pgc-h-arrow-right" data-track="193" > investment research-driven, performance-driven is the foundation of asset management companies</h1>
Q: In March, Noah released its annual report, and in its outlook for 2021, it mentioned the new positioning and new direction of Gopher's assets.
Peng Jing: Since last year, we have a new positioning - in the past, Noah and Gopher were product-driven, and now they are driven by customer needs.
In addition to being driven from product-driven to customer demand-driven, Gopher must also return to investment research-driven and investment performance-driven, which is the core content of asset management companies. If asset management companies want to go far and do a good job in investment performance, the most fundamental thing is to establish an investment culture driven by investment research as the core.
In fact, the investment research culture is also reflected in specific actions, we have spent a lot of effort to establish a research center for Gopher, and we have also found very experienced research talents to be responsible for this team.
From these actions, we can see the change in our thinking. In the past, Gopher made more types of products and more miscellaneous, and now I think about how to do the best investment performance, and the original intention and concept are completely different.
Q: Noah has now completely cut off non-standard products, but there are still many institutions in the market that rely on non-standard products, how do you think about the development of independent wealth management institutions in the future?
Peng Jing: We are not the same as traditional independent wealth management institutions.
From a product point of view, we will look at the industry from the top down, find assets, design products, and the difference between traditional independent wealth management institutions is still relatively large.
Many wealth management institutions sell non-standard because non-standard is easy to sell. But in the past two years, many trusts have exploded, indicating that it still depends on the underlying assets, and it cannot be simply believed that the trust company will just redeem.
There are still some non-standards in the market today, but we have long taken the initiative to give up this field, because its risk to customers is the difference between "0 and 1", investing in a project, in case of risk may be lost.
For standardized assets, if a good manager is selected and the time is extended to more than 3 years, the probability of obtaining a relatively satisfactory return is still relatively high, and it is not higher than non-standard. Therefore, it is still necessary to return to the common sense and essence of finance, and the concept of non-standard may be wrong in itself.
Now after the non-standard transcoding, the product differentiation is gone. In the new battlefield, we need to think about where our products are competitive and whether we are thinking around customer needs.
Doing a good job in investment performance and investment research is actually centered on customer needs.
We have repeatedly emphasized acting around the goal internally, such as flagship products should not be too much, and the underlying account should not be managed too much, otherwise the future investment operation pressure is very large, and it will eventually affect the investment performance. Around these ideas, we have made a lot of strategic adjustments.
<h1 class="pgc-h-arrow-right" data-track="195" > smart + hard-working investment manager</h1>
Q: What do you think is the traits of a good investment manager or a good product manager?
Peng Jing: First, be very smart. First of all, the people who do investment and products are graduates of famous schools at home and abroad, who love finance itself, are very sensitive to market changes, and have many unique insights of their own.
Second, be diligent and continuous in your studies. Intelligence is the most basic element, and on this basis, it is necessary to invest a lot of time in continuous learning, while having to think deeply. Whether you are a fund manager or a product manager, it is important to have your own thoughts and opinions.
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