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the three-year fixed-term fund southern ruihe has entered its second open period. this is the first public offering product that "does not make money and does not require management fees." according to the fund contract, southern ruihe's closed-end management fees will be fully returned to the fund assets, and the management fees involved will exceed 30 million yuan.

according to a recent announcement, the open period is from september 6 to september 24, and the closed period will begin on september 25. since september 18 is not a trading day for the hong kong-shenzhen stock connect, subscription and redemption will be suspended on that day.

since its establishment, southern ruihe has gone through two complete closed periods. according to tiantian fund network, the cumulative net value at the beginning and end of the second closed period was 1.7456 yuan and 1.5749 yuan respectively. obviously, the net value at the end of the period is less than the net value at the beginning of the period. according to the prospectus, if the net value at the end of the fund share is less than or equal to the net value at the beginning of the period, the management fee during the closed period and the previous open period (if any) will be fully returned to the fund assets.

initially, the management fee of southern ruihe was calculated at an annual rate of 1.5% of the net asset value of the fund on the previous day. however, under the general trend of reducing fund fees, the management fee of this product has been reduced from 1.5% to 1.2% since july 2023.

according to multiple announcements, the management fees in the second half of 2021, 2022, 2023 and the first half of this year were rmb 9.2213 million, rmb 11.0131 million, rmb 10.1134 million and rmb 4.1232 million, respectively, totaling rmb 38.5933 million.

over the years, public funds have experimented with fees. in addition, bank wealth management products that frequently reduce fees have also played the "0 fee rate" card.

the first public offering product that “does not make money and does not charge management fees”

southern ruihe was established in september 2018, with an initial fundraising of 1.433 billion yuan. as of the middle of this year, the scale of the product was 710 million yuan. according to the fund contract, the product is an initiator fund, and the total amount subscribed by the initiator fund provider is not less than 10 million yuan, and the holding period is not less than 3 years.

since the establishment of the product, shi bo has served as the fund manager, and yun lei was hired as a fund manager in november 2021. according to the semi-annual report, shi bo has 26 years of experience in the securities industry. he joined southern fund in october 2009 and served as director of the research department, assistant to the president, and chief investment officer (equity). he is currently the vice president of southern fund; yun lei has 9 years of experience in the securities industry. he joined southern fund in may 2015 and served as an assistant researcher and researcher in the international business department.

the semi-annual report pointed out that southern ruihe's allocation to equity assets and fixed income assets accounted for 79.33% and 4.07% respectively; at the same time, the end-of-period assets invested in a-shares and hong kong stock connect accounted for 43.68% and 40.34% of the net value respectively. in addition, the performance benchmark of this product is "shanghai-shenzhen 300 index yield × 40% + csi hong kong stock connect composite index (rmb) yield × 20% + shanghai stock exchange treasury bond index yield × 40%".

according to tiantian fund network, in the past three years, southern ruihe has lost 11.54%, ranking 472nd among 1,960 similar products. the average loss of similar products is 30.14%. during the same period, the shanghai and shenzhen 300 index fell 34.51%. in the past week, southern ruihe ranked first among 2,319 products with a yield of 3.37%.

the semi-annual report disclosed that southern ruihe's performance in the first half of the year increased by 7.12%, higher than the 3.38% performance benchmark in the same period. since its establishment, the product has achieved a performance return of 68.16%, which is also significantly higher than the 11.35% performance benchmark.

data shows that the first closed period of southern ruihe was from september 6, 2018 to september 3, 2021, during which the return was 81.29%. the second closed period was from september 16, 2021 to september 6, 2024, during which the loss was 12.88%.

even so, southern ruihe's management fees must be fully returned in accordance with the fund contract.

multiple attempts by public offerings on fees

in addition to the direct 0 fee rate, public funds have also made many attempts on the fee issue.

as early as 2002, bosera fund designed a "value growth line" for its newly launched product bosera value growth, stipulating that when the net asset value of the fund unit shares falls below the value growth line level, the fund manager will suspend collecting fund management fees.

the bond fund guotai jinlong, established in december 2003, stipulates that if the cumulative net asset value of the fund shares of the japanese fund is less than 1 yuan six months after the fund contract takes effect (including six months), the fund manager will suspend the collection of management fees from the next day. the fund manager will resume collecting fund management fees until the cumulative net asset value of the fund is higher than 1 yuan (including).

haitong income growth, which was established in march of the following year, also pointed out in the fund contract that if the net value of the fund shares is lower than the income growth line, the management fee will be suspended from the next day when the net value of the fund shares is lower than the income growth line until the next day when the net value of the fund shares is no lower than the income growth line. if there is a statutory holiday during this period, the management fee will also be suspended.

in 2013, rongtong fund designed a target-triggered automatic liquidation fund, rongtong tongze one year, which also attracted attention in the industry. the fund contract stipulates that if the cumulative net value is higher than 1.1 yuan for three consecutive working days or the one-year closed period expires, it will be automatically liquidated. in addition, the fund adopts a new management fee model. if the cumulative return of the fund is less than 3% at the time of liquidation, the fund company will not receive any management fee.

it is worth mentioning that floating rate funds began to appear in large numbers since 2013.

“no profit, no management fee” was once popular in bank financial management

in fact, bank wealth management products are also frequently playing the "fee reduction card" and offering "0 fee rates".

just last may, an equity product under china merchants bank wealth management also advertised "no profit, no management fee". the product manual shows that when the cumulative net value of the product is less than 1 yuan, the fixed management fee of 1.5% will be suspended and will be resumed when the net value returns to 1 yuan.

at that time, this move by china merchants bank wealth management was accused of being an act of "disruption" by the wealth management subsidiary in the public offering industry.

subsequently, many bank wealth management subsidiaries including bank of china wealth management, cmb wealth management, citic bank wealth management, bank of jiangsu wealth management and minsheng wealth management successively issued announcements of fee discounts, and some products even had a temporary 0 fee rate.

in june of the same year, boc wealth management announced that it would offer a discount on the product rate of "boc wealth management-exclusive everyday" from june 21, 2023 to july 5, 2023, namely: the product fixed management fee will be reduced from 0.15% (annualized) to 0.00% (annualized). after the discount period ends, the rate will return to the rate agreed in the product manual.

previously, bohai bank also announced that it plans to waive all management fees for some wealth management products from april 17 to may 3, 2023.

at the same time, there are also views that if only the fee reduction measure is adopted, it will not have much effect on the "expansion of territory" of bank wealth management companies, and bank wealth management companies also need to consider the impact of this move on intermediary business income.