from "emphasis on scale" to "emphasis on people's sense of gain", how to change the thinking of 31 trillion public funds
2024-09-29
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
for a long time, management fees from drought and flood guarantees have been the main source of income for fund companies, which has also caused the industry to focus on scale. during the peak period of the market, investors enthusiastically entered the market and fund companies expanded their scale, forming a virtuous cycle. however, due to market fluctuations and adjustments, this seemingly "happy" atmosphere was also broken. the continued losses caused investors to gradually lose enthusiasm and even lose confidence. , the holding experience declined rapidly.
against this background, regulators have repeatedly advocated that the fund industry truly change its marketing model from the perspective of holders. among them, requirements such as "shifting from scale-oriented to investor return-oriented" undoubtedly require asset management institutions to turn investors into the sense of gain is placed in a more important position.
according to industry insiders, the shift from scale-oriented to investor return-oriented is a correction to the existing development ideas of public funds. only when investors are satisfied can public funds go further. however, improving investors’ sense of gain is not achieved overnight and requires long-term joint efforts from all parties. in actual operations, fund companies need to do a good job in managing assets and liabilities.
the "heavy scale" trend is unsustainable
recently, the "guiding opinions on promoting the entry of medium and long-term funds into the market" (hereinafter referred to as the "guiding opinions") jointly issued by the central financial office and the china securities regulatory commission once again emphasized the need to strengthen the core capabilities of fund companies in investment research and formulate scientific, reasonable, fair and effective the investment research capability evaluation index system guides fund companies to transform from scale-oriented to investor return-oriented.
for fund companies, management fees linked to scale are their most important source of income, and changes in a company's management scale are often regarded as important indicators of operating conditions. the profit model has also led to fund companies’ desire for scale to a certain extent. in 2020 and 2021, when the capital market explodes, the expansion of the public offering market is particularly obvious.
wind data shows that at the end of 2019, the net asset value of the entire public offering industry was 14.84 trillion yuan, while at the end of 2021 this number was 25.71 trillion yuan. in two years, the public offering industry increased its scale by nearly 11 trillion yuan, and the overall expansion more than 70%, the number of products has also expanded from 6091 to 9175.
in the past two years, driven by the money-making effect, the trend of buying funds has swept the market. some fund companies have been oriented by market hot spots and intensively issued new funds, betting on the industry. star fund managers and "hot" products have appeared frequently. . at the same time, fund sales agencies, as "seller agents", also played an indispensable role, adding fuel to the fire and attracting many investors to swarm into the market at a high level.
subsequently, the market continued to show a divergent trend of switching styles, and industries where fund managers had heavy positions were subject to adjustments. equity products that were closely related to the stock market were naturally also burdened. from the perspective of investors, they obtained higher profits in the previous rising market, but suffered losses after adding positions. this also led to their poor investment experience, decreased confidence and pessimism.
"previously, all parties were in a virtuous cycle, and of course the experience was very good." a person from a fund company in south china said when communicating with china business news that with the help of the bull market, there was a resonance between the market and the public offering industry, and the scale of fund issuance was large. , attracting more incremental funds; and these incremental funds have formed a "group" because of similar institutional aesthetics, which has pushed up the net value of the fund and once again attracted more investors to participate.
however, after the turning point of the cycle appeared, the phenomenon of "high-level issuance" and "pursuing explosive products" backfired. in his view, under the heavy marketing in pursuit of scale, it was not suitable for higher-risk investors to enter the market at high levels before, resulting in the current situation of being deeply trapped. all parties including the industry, companies, channels, etc. need to reflect.
"in order to expand scale, fund companies continue to launch new funds at market highs, but fail to remind investors of risks from the perspective of investors. this not only damages the investor experience, but also has a negative impact on the fund company's own performance reputation." shanghai a person in the fund industry believes that generally when the market is in a downturn and risks are low, investment will be intensified, but the actual situation is that the market is hot and funds are accelerating to enter the market to chase higher prices.
in his view, the unprecedented change in investors’ mentality also shows that a considerable number of investors lack risk awareness of the investment market and mistakenly regard high returns as the norm. it also reflects the intensification of fund companies’ marketing strategies and investor education. there are deficiencies in aspects.
shift to investor return orientation
in fact, investor dissatisfaction and the dual decline in performance and reputation of the public offering industry have long attracted regulatory attention, and relevant requirements have been issued many times recently. as early as april 2022, the "opinions on accelerating the high-quality development of the public fund industry" clearly stated: focus on improving investors' sense of gain and guide fund managers and fund sales agencies to firmly establish a marketing concept with investor interests as the core .
in april this year, the new "nine articles of the nation" ("several opinions of the state council on strengthening supervision, preventing risks and promoting high-quality development of the capital market") once again emphasized the need to establish a market ecosystem that cultivates long-term investment, comprehensively strengthen the construction of investment research capabilities of fund companies, and start from the perspective of scale. orientation towards investor return-oriented transformation, etc.
the institutional supervision report released at the beginning of this month also showed that the regulatory authorities have comprehensively revised the classification and evaluation system for public fund managers. investors' sense of gain is also one of the evaluation dimensions to avoid "seniority ranking" based solely on business scale. for example, "increase the counter-cyclical layout indicator, and deduct points for managers with large high-end issuance scale and poor investor experience, and otherwise add points."
on september 24, wu qing, chairman of the china securities regulatory commission, once again stated at a press conference of the state council information office that the china securities regulatory commission will vigorously develop equity public funds, focusing on urging fund companies to further correct their business philosophy, adhere to the investment return orientation, and strive to improve investment research and service capabilities to create more products that meet the needs of the people.
"promoting the industry to return to its origins, establishing correct business concepts, and properly handling the relationship between functionality and profitability are key considerations for strengthening supervision, and are also a concrete manifestation of grasping the political and people-oriented nature of financial work." said a person from a medium and large fund company. , high-quality development has been the main theme of the public offering industry in recent years. in addition to the bottom line of compliance and risk control, institutions need to put investors' sense of gain in a more important position.
the aforementioned fund industry insiders also believe that these measures demonstrate the regulatory emphasis on the healthy development of the fund market and aim to create a more stable and favorable investment environment. in the context of encouraging the development of equity funds, fund companies should focus on product stability and investor experience improvement, and use performance reputation to enhance investor trust.
a win-win situation requires a change of thinking
the so-called investor's sense of gain, that is, the investment holding experience, is reflected in the investor's true income level on the one hand. the more you earn, the higher your sense of gain, and vice versa. on the other hand, there is the deviation between fund products and the real returns of investors, which is mainly caused by behavioral influences such as chasing the rise and killing the fall. behind the cold figures of investor income, the essence is warm investor demand.
nowadays, the public fund industry has reached the 31 trillion yuan mark, and the growing scale also means that the industry will face more challenges. "in fact, we conducted research and analysis through channels or for our own customers and found that most investors have a relatively low tolerance for drawdowns and fluctuations." the aforementioned south china fund related person said when communicating with china business news.
after combining experience and lessons, he further said that fund companies need to do a good job in managing assets and liabilities in actual operations. on the asset side, fund managers need to continuously improve their active management capabilities, especially to improve the long-term stability of performance and the ability to control drawdowns, and to integrate investor experience into their own investment decisions and frameworks.
on the liability side, it is necessary to strengthen investor education, guide investors to have a deeper understanding of product characteristics, their own return expectations and risk tolerance, and do a good job in investor suitability management and matching.
"on the premise of providing investors with a good investment experience, investors will also have more recognition and trust in the fund company, thereby achieving a gradual improvement in the overall scale of the product and the company. ultimately, a win-win situation will be achieved," he said.
in fact, this point has actually been realized by fund companies. the reporter learned from a number of fund companies that in the past two years, continuing to increase investment in investor education has been one of their key tasks to guide investors to view investment more rationally, including not only publicizing the potential returns of investment, but also emphasize the existence of risks and help them assess and manage risks more comprehensively.
in addition, there are many opinions in the industry that financial institutions need to change their thinking in the early stages of product sales: from "buying for short-term gains" to "buying because of trust." a non-bank financial research analyst believes that in the era of asset management, the core goal of asset management institutions is "how to perform well and strive for better net value performance of fund products." however, in the era of new asset management regulations, the core goal of wealth management institutions the core goal may be to focus on "how to improve the net worth of investors' accounts."
in his view, relying solely on the "performance horse racing" on the asset side cannot meet the needs of investor education and investment advisory services on the liability side. in the era of post-new asset management regulations, the sales of wealth management products are not based on the logic of short-term "new issuance", but long-term "preservation".
(this article comes from china business news)
