On April 26, the CSRC issued the opinions on accelerating the high-quality development of the public fund industry, which proposed to adhere to the interests of investors as the core, effectively improve the ability of the public fund industry to serve the reform and development of the capital market, the wealth management needs of residents, the real economy and national strategy, and correctly handle the relationship between scale and quality, development and stability, efficiency and equity, high growth and sustainability, Earnestly promote the development of the industry and the interests of investors. The opinions put forward 16 opinions on four aspects: actively cultivating professional asset management institutions, Comprehensively Strengthening Professional capacity-building, striving to create a good development ecology of the industry and continuously improving the efficiency of regulatory transformation, covering the overall direction and focus of industry development, the responsibility guidance of market subjects, supervision and industry infrastructure construction.
Improve the overall quality of the manager group, and promote the benign development of the public fund industry centered on the interests of investors by introducing advanced management mode and improving incentive mechanism. The opinions put forward requirements for the high-quality development of fund managers. In cultivating professional asset management institutions, it emphasizes supporting differentiated development, effectively improving governance level, expanding the team of public fund managers, steadily promoting high-level opening-up and strengthening long-term incentive and restraint mechanism. In recent years, the public fund industry has developed rapidly. According to the data of the fund industry association, by the end of February 2022, there were 9491 funds in the market, with a fund management scale of 26.34 trillion yuan and 152 fund managers. The compound growth rate of the scale in the past five years was 24.45%. With the continuous growth of disposable income of Chinese residents and the gradual maturity of investment concept, it is expected to promote the rapid development of public fund industry from the demand side; However, from the supply side, at present, the homogenization of public fund products is more serious, and the net value fluctuates greatly. The phenomenon of “funds make money but basic people don’t make money” is prominent. In view of the above problems, the opinions encourages overseas institutions to set up fund management companies or increase the existing shareholding ratio, introduce overseas advanced asset management experience and beneficial business models, and effectively improve the industry’s operation ability and asset management level while continuously expanding the team of fund managers. At the same time, the Opinions also strengthened guidance in terms of assessment mechanism and incentive mechanism, urged fund managers to establish and improve a long-term assessment mechanism covering core employees such as operation management and fund managers, and encouraged fund managers to strive to improve their core competence in investment and research and strengthen their compliance risk control ability. The improvement of core systems such as assessment and incentive is expected to fundamentally optimize the fund management mode, realize the consistency between the long-term development of employees and the company and the long-term interests of holders, and then promote the sound development of the industry.
The importance of optimizing the fund publicity mode and continuing to carry out investor education has been increasing, which has become an important part of the optimization of fund management formats. According to the opinions, managers and sales institutions should be guided to abandon the sales model of “emphasizing the initial sale and neglecting the operation”, and short-term incentive behavior and increasing incentive arrangements for long-term investment behavior such as fixed investment of funds should be strictly prohibited; We will do a good job in implementing the policy of individual pension investment in public funds, encourage industry institutions to develop all kinds of fund products with lock-in period and service life cycle for investors, and effectively improve the medium and long-term capital service level. In addition, the opinions requires fund managers to promote the industry to better uphold the concept of medium and long-term investment from the demand side by strengthening investor education, so as to effectively maintain the long-term stability of the capital market.
The high-quality development of public funds is expected to help the head platform of the securities industry stronger. Promoting the high-quality development of the public fund industry is one of the important measures to deepen the reform of China’s capital market. At present, the public fund products have become an important link between small and medium-sized investors and the capital market. The opinions not only guide the direction of the high-quality development of the industry, but also play an important role in boosting investor confidence, encouraging medium and long-term capital to enter the market and maintaining the stability of the capital market. From the perspective of the structure of public fund managers, there are 67 fund managers in the Department of securities companies. With the beginning of the era of large asset management in the financial industry and the transformation of wealth management of securities companies has become the main theme of the development of the industry and the core concern of the market, the fund company is expected to become an important support for the business coordination and performance contribution of securities companies. The high-quality development of the fund industry will make the competitive advantage of the head securities companies that control and participate in high-quality fund companies more prominent.
Investment suggestion: in the medium and long term, head platforms such as Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) are expected to accelerate the transformation of wealth management with the help of the development of fund management business. At the same time, as the core flow entrance, wealth management platform is expected to help expand profit space, improve the certainty of performance growth and further enhance its competitive advantage in the industry. After continuous adjustment in the early stage, the current valuation of the industry’s head target has fallen back to the undervalued range, and the medium and long-term investment value is prominent. It is recommended to focus on it.
Risk tips: macroeconomic downside risk, policy risk, market risk and liquidity risk.
