Core Viewpoint - The first batch of 26 new floating fee rate funds has been approved, with fundraising expected to start by the end of May and largely complete by the end of June [1] Group 1 - The new products aim to guide investors towards long-term investments, enhancing their potential for better long-term returns [1] - The focus will not be on the scale of fundraising but rather on the quality of initial sales, avoiding the "high open low walk" phenomenon [1] - Fund managers will prioritize selecting fund managers and strengthening research support to improve the long-term investment experience for investors [1]

Group 1 - The core content of the "Action Plan for Promoting the High-Quality Development of Public Funds" focuses on guiding fund managers to return to the essence of "entrusted by others, managing wealth on behalf of clients," aiming for high-quality development in the public fund industry [1] - The main direction of the plan is to align with investor interests and enhance their sense of gain, emphasizing the importance of products that can track performance benchmarks with low volatility and controllable risks, rather than merely seeking excess returns [1] - Active equity funds with a turnover rate of 5-10 times, balanced stock and industry holdings, and a management scale of 500 million to 5 billion yuan are more likely to outperform performance benchmarks, while products with style drift show poor performance [1] Group 2 - Over half of the public active equity funds in the market use the CSI 300 index as their core benchmark, with 15% using the CSI 800 index, indicating a significant deviation from actual performance, necessitating changes in benchmarks or holdings [2] - The financial sector has a holding return amount of 264.9 billion yuan, accounting for 4.6% of the sector's free float market value, which is significantly higher than other industries, highlighting the need for attention in cyclical high-dividend sectors like coal, oil, and utilities [2] - As of the first quarter of 2025, active equity funds are mainly overweight in technology and manufacturing sectors, while being underweight in finance and infrastructure, with notable continuous overweights in pharmaceuticals and electronics since 2020 [2] Group 3 - Following the release of the plan, funds have begun to modify their performance benchmarks, with nearly 120 funds changing benchmarks this year, including various types such as equity mixed funds and flexible allocation mixed funds [3] - Performance benchmarks are considered an important reference for portfolio construction, with a focus on achieving stable risk-return characteristics over the long term rather than extreme short-term performance [3] - A new batch of floating management fee funds will be launched, adopting a performance benchmark-based fee model that adjusts management fees according to the fund's performance relative to the benchmark during the holding period [3]

Core Viewpoint - The recent action plan issued by the China Securities Regulatory Commission aims to address long-standing issues in the public fund industry, promoting high-quality development by linking fund company income to investor returns [1][3][6]. Summary by Relevant Sections Fund Management Fees - The new regulations require a floating management fee mechanism linked to fund performance, particularly for newly established actively managed equity funds [5][9]. - Management fees for different fund types vary, with stock and mixed funds typically charging between 1.2% and 1.5% [3]. - In 2023, only about 39% of the 4,510 fund products had positive returns, highlighting the disparity between high management fees and poor investor returns [3]. Performance Benchmark Changes - Following the action plan's release, several fund companies have already adjusted their performance benchmarks to align with the new regulations [10]. - The performance benchmark serves as a reference for evaluating fund performance, often based on a combination of market indices [5]. Impact on Fund Companies - The new policy is expected to shift fund companies' focus from scale-driven to performance-driven strategies, enhancing their investment strategies and risk management [6][12]. - Fund companies are encouraged to invest more in research and development to improve their investment capabilities [6]. Fund Manager Accountability - The action plan imposes stricter salary management for fund managers, linking their compensation to fund performance [13][14]. - Fund managers whose products underperform relative to benchmarks will see a significant decrease in performance-based pay, while those who exceed benchmarks may receive higher compensation [13]. Market Reactions and Concerns - The changes have sparked discussions among investors, with many believing that the new performance-linked compensation will improve fund management effectiveness [13][14]. - However, some investors express concerns that an overemphasis on performance benchmarks may lead to homogenized investment strategies, potentially increasing market volatility [15].

Core Viewpoint - The public fund industry in China is undergoing significant reforms aimed at improving performance and aligning fund manager compensation with fund performance, as outlined in the "Action Plan for Promoting High-Quality Development of Public Funds" issued by the China Securities Regulatory Commission (CSRC) [1][3]. Group 1: Reform Details - The new plan includes a performance-based compensation structure for fund managers, where those managing funds that underperform their benchmarks by more than 10% over three years will see a significant decrease in their performance pay [1][6]. - The plan mandates that, within the next year, leading fund management companies must issue at least 60% of their new funds as floating management fee products, which are linked to fund performance [1][6]. - Currently, only 138 public fund products charge floating management fees, indicating a need for increased adoption of this fee structure [1]. Group 2: Industry Context - The public fund industry has experienced volatility over the past five years, with many investors facing disappointing returns, leading to a decline in new investors [2]. - A significant portion of funds, approximately 23.2%, have underperformed their benchmarks by over 10% in the last three years, highlighting the need for reform [5]. - The reforms aim to address the issue of fund managers profiting while investors do not, a situation that has been increasingly scrutinized [3][5]. Group 3: Fee Structure Changes - The new floating management fee structure will adjust fees based on performance relative to benchmarks, with lower fees for underperformance and higher fees for exceeding benchmarks [3][6]. - The reforms are designed to create a more investor-friendly environment by aligning the interests of fund managers with those of investors, promoting long-term investment strategies [8][10]. - The shift towards floating fees is part of a broader trend to reduce costs for investors and improve the overall competitiveness of the public fund industry in China [10].

Core Viewpoint - The public fund industry in China is undergoing significant reform with the introduction of a floating fee structure linked to fund performance, aiming to shift the focus from scale to returns [1][2][3]. Group 1: Regulatory Changes - The China Securities Regulatory Commission (CSRC) has released the "Action Plan for Promoting the High-Quality Development of Public Funds," which includes 25 measures to reform the industry [2][3]. - A key aspect of the plan is to link management fees to fund performance, requiring lower fees for underperforming funds, thereby addressing the "guaranteed income" issue in the industry [2][3]. - The plan mandates that at least 60% of newly issued active equity funds by leading firms must adopt a floating management fee structure within the next year [3]. Group 2: Industry Performance - As of the first quarter of 2025, public funds generated a total profit of 2,517.47 billion yuan, doubling from 1,143.23 billion yuan in the previous quarter [4]. - The top 10 public fund companies accounted for 56.9% of the total net profit, with significant contributions from mixed and equity funds [4][5]. - The number of public fund products reached 12,532, but only 138 (1.1%) currently utilize a floating management fee structure [3][4]. Group 3: Market Trends - The issuance of equity funds has increased significantly in 2025, with over 3,400 billion yuan in new products, of which equity funds accounted for 1,837.53 billion yuan, exceeding 50% of the total [5]. - The shift towards floating management fees is expected to increase performance volatility and differentiation among funds, particularly affecting the income of leading firms based on fund performance [5].

Core Insights - The report emphasizes the need for the public fund industry to shift from focusing on scale to prioritizing returns, as outlined in the "Action Plan for Promoting High-Quality Development of Public Funds" released by the China Securities Regulatory Commission [3][5][6]. Group 1: Key Highlights of the Action Plan - The Action Plan highlights four main focuses: strengthening the alignment of interests with investors, enhancing the stability of fund investment behavior, improving investor service capabilities, and promoting the growth of equity funds [4][6]. - A floating management fee mechanism will be established, linking fund managers' income to the performance of their products, thereby addressing the issue of guaranteed income regardless of performance [6][11]. - The plan mandates a reduction in subscription and sales service fees for public funds, aiming to lower investor costs and enhance their experience [6][18][21]. Group 2: Focus Areas for Fund Companies - Fund companies are required to reform their assessment and incentive schemes, incorporating investor profit and loss into their evaluation systems, which marks a shift towards a more investor-centric approach [4][17]. - The plan encourages the development of passive equity products, with a clear distinction between active and passive strategies, promoting low-fee models for passive investments [4][24]. - The registration process for equity products will be expedited, with specific timelines set for different types of funds to enhance market responsiveness [24]. Group 3: Implications for the Industry - The report suggests that the ongoing reforms will enhance the pricing power of allocation funds and optimize the structure of active equity investments, especially in a low-interest-rate environment [41]. - The floating fee index-enhanced products are expected to become a key focus for fund companies, as they seek to improve management fee income while controlling performance deviation [45]. - The demand for investment advisory and strategy services is anticipated to rise significantly, necessitating a shift towards a more comprehensive service model for both institutional and individual investors [50][55].

Group 1: Monetary Policy Adjustments - The People's Bank of China (PBOC) will lower the reserve requirement ratio for financial institutions by 0.5 percentage points starting May 15, 2025, and by 5 percentage points for auto finance and leasing companies [1] - The PBOC has also reduced the re-lending rates by 0.25 percentage points, with new rates set at 1.2%, 1.4%, and 1.5% for 3-month, 6-month, and 1-year agricultural and small business re-lending respectively [1] - The PBOC has increased the re-lending quota for technological innovation and technical transformation by 300 billion yuan, bringing the total to 800 billion yuan [3] Group 2: Support for Capital Markets - The PBOC has merged the total quota of two monetary policy tools aimed at supporting capital markets, allowing for a combined usage of 800 billion yuan [2] - Nearly 500 market institutions plan to issue over 300 billion yuan in technology innovation bonds, indicating strong market response to the new "technology board" initiative [8] Group 3: Development of Technology Innovation Bonds - The PBOC and the China Securities Regulatory Commission (CSRC) have announced the issuance of technology innovation bonds by financial institutions and technology enterprises to support investment in the technology sector [4] - The new bond issuance framework aims to enhance the financing capabilities of technology firms and promote innovation [4] Group 4: Fund Management Fee Structure - The CSRC has introduced a floating management fee structure linked to fund performance for newly established actively managed equity funds, encouraging better performance alignment with investor interests [6]

Core Viewpoint - The article discusses the release of the "Action Plan for Promoting the High-Quality Development of Public Funds," which aims to address industry pain points and shift the focus from "scale" to "returns" in the public fund sector, enhancing investor experience and binding the interests of fund companies and investors more closely [1][2]. Group 1: Key Measures of the Action Plan - The plan emphasizes the need to strengthen the binding of interests between fund companies and investors, particularly through the implementation of a floating management fee structure linked to fund performance [2][3]. - Fund companies are required to establish a performance-based floating management fee mechanism, where fees are adjusted based on the fund's performance relative to a benchmark [2][3]. - The China Securities Regulatory Commission (CSRC) aims for leading fund companies to issue floating fee funds that account for at least 60% of their actively managed equity fund issuance within a year [3]. Group 2: Performance Evaluation and Incentives - The plan highlights the importance of a stable investment behavior and calls for a comprehensive evaluation system that focuses on long-term performance rather than short-term metrics [5][6]. - Fund companies must implement a performance evaluation system where investment returns are the core metric, reducing the weight of operational indicators like scale and profit [6]. - The plan mandates that the performance metrics for fund managers should have a weight of at least 80% based on fund performance over a three-year period [6]. Group 3: Innovation and Market Activity - The plan encourages the innovation and development of equity funds, aiming to enhance their role as stabilizers in the A-share market [8][9]. - It proposes a rapid registration mechanism for equity funds, allowing for quicker market entry of new products, which is expected to increase market liquidity and attract long-term capital [9][10]. - The plan also emphasizes the need for fund companies to enhance their research capabilities and service levels to better meet investor needs [11][12]. Group 4: Risk Management and Compliance - The plan outlines measures to improve risk management and compliance within the industry, including the establishment of a mechanism for fund manager co-investment and stricter oversight of fund performance [12]. - It stresses the importance of maintaining a stable and compliant industry environment to attract long-term investments and ensure sustainable growth [12].

Core Viewpoint - The article discusses the "Action Plan for Promoting High-Quality Development of Public Funds" issued by the China Securities Regulatory Commission, which aims to enhance the public fund industry by implementing 25 measures to improve fund management, investor returns, and overall industry standards [1][6]. Group 1: Overall Requirements - The plan is guided by Xi Jinping's thoughts and aims to implement decisions from various central meetings, focusing on strong regulation, risk prevention, and high-quality development [7]. - It emphasizes a shift from prioritizing scale to focusing on investor returns, ensuring that the interests of investors are at the core of fund operations [7]. Group 2: Optimizing Fund Operation Models - A floating management fee mechanism linked to fund performance will be established, encouraging funds to align their fees with investor returns [8][9]. - The plan includes measures to lower investor costs by reducing subscription fees and management fees for large index and money market funds [9][10]. Group 3: Improving Industry Evaluation Systems - Fund companies are required to establish a performance evaluation system centered on investment returns, with significant weight given to long-term performance [10][11]. - The evaluation criteria will include investor profit and loss, fund performance against benchmarks, and the stability of investment behavior [10][11]. Group 4: Enhancing Equity Investment Scale - The plan aims to increase the scale and proportion of equity investments in public funds, with a focus on innovative fund products that encourage long-term holding [13][14]. - A rapid registration mechanism for equity funds will be implemented to streamline the process and promote timely market entry [13][14]. Group 5: Promoting High-Quality Development - The governance of fund companies will be improved, emphasizing the role of major shareholders and independent directors [15][16]. - The plan supports the development of core investment research capabilities and encourages the use of technology in fund management [15][16]. Group 6: Risk Management and Compliance - A multi-layered liquidity risk prevention mechanism will be established to enhance the stability of the industry [18][19]. - The plan includes measures to strengthen compliance and regulatory enforcement, ensuring that violations are met with strict penalties [21][22].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) is set to release a mature action plan aimed at promoting the high-quality development of public funds, emphasizing the alignment of interests with investors [1] Group 1: Action Plan Highlights - The action plan will focus on reinforcing the fiduciary duty of the industry, urging a return to the core principle of managing investments on behalf of clients [1] - It aims to optimize the fee structure for actively managed equity funds, ensuring that funds with poor performance charge lower management fees [1] - A floating management fee mechanism will be introduced to address the issue of fund companies benefiting regardless of performance, known as the "drought and flood insurance" phenomenon [1] Group 2: Performance Metrics - The plan will incorporate investor profit and loss metrics into the assessment criteria for fund companies and fund managers [1]