Matters:
Recently, the CSRC issued the opinions on accelerating the high-quality development of the public fund industry (hereinafter referred to as the opinions), which aims to solve the problems of insufficient professional adaptability and unbalanced structure in the public fund industry and promote the high-quality development of the industry.
Ping An View:
The 16 measures in the opinions improve the top-level planning and promote the high-quality development of public funds. The opinions gives guidance to public funds, investors, regulatory agencies and other market entities: 1) for public funds: relax the restrictions on public fund licenses; Support the differentiated and professional development of asset management institutions, and encourage the integrity and innovation of products and businesses; Improve the core competence of investment research and establish a long-term incentive and restraint mechanism; 2) For investors: increase the proportion of medium and long-term funds and improve the service level of pension needs; Strengthen the construction of industrial infrastructure and improve the sense of gain of investors; 3) For regulatory agencies and other market entities: clarify the boundary of regulatory responsibilities and improve the crackdown on violations of laws and regulations; Strengthen the joint efforts of the industry and continuously improve the regulatory efficiency.
China’s public fund industry is in a stage of rapid development. 1) Since 2019, the scale of public funds has expanded rapidly. As of 2022q1, the scale of public funds has reached 25.14 trillion yuan, nearly double that of 2018. 2) The proportion of goods based scale fell from 63.15% in 2018 to 40.23% in 2022q1, but it is still the main fund product; The proportion of equity funds continued to increase, with equity funds and hybrid funds accounting for 8.19% and 21.19% respectively, an increase of 2.48 PCT and 9.77 PCT over 2018. 3) The head structure of the fund company is relatively stable, with e fund, Huaxia Fund and GF ranking the top three in terms of non commodity based net asset value; The industry concentration has not changed much. The non cargo based scale Cr5 and CR10 in 2022q1 are 20.32% and 37.74% respectively.
Policy support + strong demand, public funds need to speed up supply side capacity-building. With the release of restrictions on public fund licenses in the opinions, securities companies, insurance companies, banks and other financial institutions can apply for licenses, design public fund products and improve the layout of big wealth management business in combination with their own resource endowment. The supply of public fund products will be further enriched. With the deepening of capital market reform, the upgrading of residents’ financial needs and the implementation of the top-level personal pension system, the public fund market is expected to continue to expand. On the one hand, the opinions continue the policy support for the development of public funds in recent years, on the other hand, it also puts forward new requirements for industry development, standardization and innovation. Public funds need to speed up capacity-building on the supply side to match the escalating demand for wealth management and the development of capital market.
Investment suggestion: the opinion defines the future development direction of the public fund industry, promotes the further transformation and upgrading of various asset management institutions, and has important guiding significance for the high-quality development of the public fund industry. It is suggested to pay attention to China stock market news, the leading platform of fund sales, Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) , and Yunnan Wenshan Electric Power Co.Ltd(600995) , the leading comprehensive securities companies with leading product power, service ability and brand power.
Risk tips: 1) capital market reform is not as expected. 2) The equity market fluctuated sharply. 3) The epidemic has repeatedly affected investors’ risk appetite. 4) Macroeconomic downside risks.
