Core Viewpoint - The "fixed income +" product model has become mainstream, but there is a growing demand for more flexible options as the equity market valuation recovers. The article highlights the unique characteristics of the mixed investment team at China Merchants Fund, which aims to provide diverse investment opportunities for both institutional and individual investors. Group 1: Investment Style - The mixed investment team at China Merchants Fund adopts a left-side contrarian investment style, buying during market panic and selling during exuberance [1][3]. - Their investment philosophy is centered around absolute returns, focusing on high win rates through left-side buying and selling strategies [3][5]. - The team emphasizes cyclical thinking, believing that undervalued assets will eventually rebound while overvalued assets will decline [4]. - They prioritize valuation protection by buying assets at lower valuations, which provides stronger protection against market fluctuations [5][6]. Group 2: Asset Allocation - The team pursues high win rates in asset allocation, recognizing the importance of macroeconomic data, global policy directions, and asset valuations [7][8]. - They have demonstrated the ability to capitalize on market opportunities, such as increasing stock positions during significant market downturns [7][8]. - The team effectively transforms market volatility into a source of returns through strategic asset allocation [8]. Group 3: Investment Strategies - The mixed investment team employs diverse investment strategies, including stock selection, convertible bond investments, credit bond trading, and tactical asset allocation [2][11]. - They are not conservative in their rights-holding investments, focusing on growth potential while maintaining valuation discipline [9][10]. - The team has achieved over 10% returns in various products over the past year, showcasing their ability to provide unique product offerings [10]. Group 4: Innovation and Assessment - Continuous innovation is a hallmark of the team, encompassing product design, investment methods, and assessment models to enhance absolute returns and user experience [17][18]. - The team has developed a differentiated assessment approach based on user channels, focusing on long-term performance and client profitability [14][16]. - They aim to create a sustainable absolute return for clients by integrating various asset classes and strategies into their product offerings [19][20].

Core Viewpoint - The newly developed classification and regulatory rating method for wealth management companies has entered the trial rating phase, with results recently distributed to companies, indicating a shift towards prioritizing quality over scale in the banking wealth management sector [1][10]. Summary by Relevant Sections Rating Methodology - The rating method emphasizes "quality over scale," discouraging wealth management companies from merely pursuing growth in size. Key evaluation factors include corporate governance, asset management capability, risk management, information disclosure, investor rights protection, and information systems, with asset management capability carrying the highest weight [1]. - The rating results are categorized into six levels, with higher numbers indicating lower scores and greater need for attention. Companies rated 1 or 2 can pilot innovative business, while those rated 5 or 6 are considered high-risk [1]. Trial Rating Results - Initial trial ratings for leading companies were reportedly poor due to the scientific evaluation logic and detailed indicator settings, which resulted in small score differences across companies. Larger companies faced disadvantages due to their scale being used as a denominator in the calculations [2]. - Some industry insiders noted that leading companies performed poorly because they engaged in practices like high-yield cash products, which negatively impacted their quality indicators [2]. Key Pressure Points - The performance benchmark achievement rate is highlighted as a significant pressure point for wealth management companies, with the need for adjustments in product performance metrics to align with asset conditions [4]. - The regulatory focus on increasing the scale of mixed and equity products is evident, with a target of raising the proportion of these investments [5]. Investment Strategy Adjustments - Companies are required to reduce the scale of external investments, as lower external investment ratios lead to higher scores. Many companies currently rely on external managers for asset allocation, which is now being scrutinized [7]. - The inclusion of preferred stocks in equity investments raises questions about the true nature of equity holdings among wealth management companies, as some may not hold traditional stocks or equity [6]. Distribution Channel Evaluation - The management of distribution channels is a critical evaluation metric, particularly affecting companies that distribute through smaller banks. The complexity of evaluating various distribution systems poses challenges for compliance [8][9]. Regulatory Implications - The introduction of the rating method signifies a more stringent regulatory environment for the wealth management industry, aimed at addressing irregularities and promoting compliance among companies [10]. - While the rating method may raise the bar for new company approvals, it is unlikely to deter interest in obtaining licenses, as the demand for such licenses remains high [11].