Wang Baohe, Wells Fargo Fund: ETF is the best tool for asset allocation Smart beta products have a broad space for development

On August 10th, Snowball × Wells Fargo Fund Club Nanjing Special Investment Forum was held in Nanjing. Wang Baohe, General Manager of the Quantitative Investment Department of Wells Fargo Fund, attended the meeting and delivered a wonderful speech on how to optimize ETF products in the A-share market. Its core view is that ETF is the best tool for asset allocation, and smart beta products have a wide range of development space.

What are the advantages of etf products? In answering this question, Wang Baohe said that ETF products have three main advantages. First, etf as a trading fund, compared with the general fund, its advantage lies in flexibility, as long as you have a stock account can do transactions; in addition, compared with the subscription fee and redemption fee when applying for the general fund, the etf transaction fee is lower; second, the operation transparency, the etf fund will publish its positions every day, improving the transparency of the entire operation process; third, the etf fund tracking error is small, can better achieve the purpose of copying the index.

For the reasons for the rapid rise in the scale of ETFs in recent years, Wang Baohe explained that the yield of bank wealth management products has been declining in recent years, which shows that banks are facing a large asset shortage problem. Through the traditional institutions to buy bonds, non-standard has been unable to maintain the yield of wealth management products, institutional investment philosophy began to shift to asset allocation. He stressed: "The tool with better asset allocation is ETF, which is an important reason for the rapid growth of ETF. ”

Starting from the types of ETFs and their development status, Wang Baohe pointed out that in the United States, the broad-based index, the industry index, and the smart beta index are in a three-legged situation. In China, the broad-based index accounted for 73% and the industry index accounted for 23%. Smart beta accounts for a relatively small proportion in China, so with the maturity of China's capital market, there will be a very large space for smart beta products in the future. "If investors have a certain judgment about the market growth value style, they may choose this kind of smart beta product," he suggested.

Talking about the competition of fund companies in ETF products, Wang Baohe admitted that the current competition of fund companies in ETF products has entered a white-hot stage. "But wells Fargo fund has a wide layout and rich experience in ETF products," he added, "At present, Wells Fargo Fund has ETFs that represent growth gems, we also have ETFs that track the Shanghai Composite Index that represent the uniqueness of the market, and we also have a series of smart beta products, such as Wells Fargo CSI value ETFs and military leading ETFs." In the future layout, the rich will lay out a series of products such as consumption 50, medicine 50, and technology 50. ”