Group 1 - The innovative floating fee rate funds have become a significant highlight in the fund issuance sector, with 19 products currently available, including those from Tianhong Fund and Bosera Fund [1] - Xingsheng Global Fund announced a plan to use its own capital of 20 million yuan to subscribe to the Xingsheng Global Heqi Mixed Fund, committing to a holding period of no less than 3 years, marking it as the only initiator fund among the first batch of innovative floating fee rate funds [1] - Bosera Fund and Tianhong Fund also announced their own investments in floating fee rate funds, indicating a trend where fund companies are investing their own capital to signal confidence in the long-term value of these products [1] Group 2 - The introduction of innovative floating fee rate products represents a milestone in the rapid development of the public fund industry, but it poses significant challenges to the traditional profit models of fund companies [2] - These products lack a lock-up period, requiring fund managers to stabilize their performance closely to the benchmark while managing a portion of their assets for enhancement, which presents strategic challenges for some active fund managers [2] - The need for real-time tracking of each fund share's holding period and return complicates the management fee calculation, necessitating enhanced operational management capabilities and robust data processing systems within fund companies [2][3] Group 3 - The absence of a lock-up period for innovative floating fee rate products significantly impacts accounting practices and management fee calculations for fund companies, requiring upgrades to existing valuation and accounting systems [3] - The cash flow of fund companies will also be affected, as management fees can only be determined upon client redemption, necessitating the pre-allocation of management fees exceeding 0.6%, which influences the cash flow dynamics [3]

Core Viewpoint - The introduction of 16 new floating-rate funds by various fund companies marks a significant development in the fund market, driven by the recent regulatory changes aimed at linking management fees to fund performance [1][3]. Group 1: New Fund Issuance - A total of 16 floating-rate funds have been launched by 16 different fund companies, with an additional 10 funds expected to be issued soon [1]. - The issuance of these funds is seen as a response to the China Securities Regulatory Commission's new action plan aimed at promoting high-quality development in public funds [1][5]. Group 2: Floating Rate Mechanism - The floating-rate fee structure is designed to tie management fees to the performance of actively managed equity funds, with specific fee rates determined based on the fund's performance relative to a benchmark [1][4]. - The current reform is limited to new funds and does not address existing funds, which may allow fund companies to continue benefiting from a stable income regardless of performance [3][4]. Group 3: Limitations of the Reform - The floating-rate reform does not fundamentally change the existing "guaranteed income" model for fund companies, as they can still charge management fees even if performance is poor, albeit at a lower rate [4][5]. - The emphasis on fund size remains significant, as larger funds can generate higher management fees, which may detract from a focus on performance [4][5]. - The current floating-rate structure does not fully align the interests of fund companies with those of investors, as it does not tie management fees directly to the absolute profits generated by the funds [5].

Investment Rating - The report maintains an "Overweight" rating for the multi-financial sector, indicating an expectation that the sector will outperform the benchmark index [7]. Core Insights - The report highlights the implementation of the "Action Plan for Promoting High-Quality Development of Public Funds," which aims to reform the public fund industry by enhancing governance, product issuance, investment operations, and assessment mechanisms [1]. - The plan emphasizes a shift from a focus on scale to prioritizing investor returns, with a target to achieve a high-quality development "turning point" within approximately three years [1]. - The industry is expected to undergo a transformation, moving from a "scale competition" model to one that values "performance," leading to increased concentration among leading firms and differentiated competition [1]. Summary by Sections Investment Fee Reform - The plan introduces a floating management fee mechanism linked to fund performance, aiming to reduce investor costs and enhance transparency in fee structures [2][11]. - It mandates that leading institutions issue at least 60% of their actively managed equity funds as floating fee products within the next year [2][11]. Long-Term Assessment and Incentive Mechanisms - The reform requires that performance indicators for fund managers and executives have significant weight in assessments, with long-term performance being a key focus [3][12]. - The plan aims to enhance the evaluation system by increasing the weight of long-term performance metrics and investor outcomes in the assessment criteria [3][12]. Equity Investment Growth - The report stresses the need to boost the scale and proportion of equity investments within public funds, promoting innovative products that align with performance and investor returns [4][19]. - It outlines plans for expedited registration processes for various equity fund types, including ETFs and actively managed funds [4][19]. Market Consolidation and Institutional Development - The plan supports market-driven mergers and acquisitions among fund companies, aiming to enhance the capabilities of leading institutions while fostering differentiated development for smaller firms [5][18]. - It emphasizes the establishment of a first-class investment institution through improved product development and research capabilities [5][18]. Investor Service Enhancement - The report highlights the importance of improving investor services, including the launch of a centralized platform for institutional investors to access public fund investments [17]. - It outlines regulatory measures to promote standardized investment advisory services tailored to investor needs [17]. Overall Industry Outlook - The report anticipates a significant restructuring of the public fund industry, with a focus on long-term performance and investor-centric strategies, which is expected to reshape the competitive landscape [1][18].