Core Viewpoint - The presentation by Dr. Chen Peng emphasizes the importance of buy-side advisory in enhancing the investor experience and promoting the high-quality development of public funds in China, breaking down investor returns into four dimensions: excess returns (A), benchmark returns (B), investment costs (C), and behavioral losses (Gamma) [1][2]. Group 1: Market Benchmark Returns - Long-term average returns for investors are primarily derived from beta (β), which represents market benchmark returns, indicating that investors can easily obtain this return through low-cost tools like index funds [5]. - The historical stock return rate in China over the past 20 years is approximately 10%, closely resembling that of the U.S. market [6]. Group 2: Difficulty in Achieving Excess Returns - Achieving alpha (α), or excess returns through active management, is increasingly challenging due to the rising proportion of institutional investors, leading to intensified competition [9]. - Data from Morningstar indicates that the probability of active funds outperforming the index has significantly decreased in the Chinese market [9]. Group 3: Impact of Fund Costs on Investor Experience - Fund costs, both explicit and implicit, are critical factors affecting investment returns. Explicit costs include fees that are clearly disclosed, while implicit costs, such as trading fees, are often overlooked [11]. - In 2022, 320 equity funds had implicit costs exceeding 2% due to high trading costs, with an average turnover rate of 1026%, indicating frequent buying and selling that erodes investor returns [12]. Group 4: Investor Behavioral Losses - Investor behavior, such as irrational actions like "buy high, sell low," can lead to discrepancies between actual returns and fund returns, referred to as behavioral losses (Gamma) [14]. - Morningstar estimates that investment advisors can enhance client returns by 2.45% annually by optimizing investment goals and managing behaviors, thus turning Gamma from negative to positive [14].
晨星全球高级战略顾问陈鹏:基民收益=A+B-C-Gamma