Core Viewpoint - The newly released guidelines for public fund performance benchmarks aim to standardize the evaluation of fund performance, providing a clear framework for fund companies to select appropriate benchmarks and improve transparency in performance assessment [2][16]. Summary by Sections Introduction of Benchmark Libraries - The Asset Management Association of China has issued a draft guideline for public fund performance benchmarks, which includes the establishment of a benchmark element library consisting of two categories: Category One and Category Two [4][5]. - The benchmark library serves as a critical tool for evaluating fund performance, helping to correct issues like "style drift" in fund management [2][4]. Definition and Standards of Benchmark Libraries - Category One includes highly recognized and representative stock indices, while Category Two includes indices that are innovative and differentiated, with a focus on larger market capitalization [5][6]. - Specific criteria for inclusion in Category Two include a maximum weight of 20% for any single security in broad-based indices and a minimum of 30 constituent securities for non-broad indices [5]. Composition of Benchmark Libraries - Category One consists of 69 indices, while Category Two includes 72 indices, both categorized into broad-based indices, industry thematic indices, and strategy indices [7]. - Notable indices in Category One include the CSI All Share Index, CSI 50 Index, and CSI 300 Index, while Category Two includes indices like the CSI 700 Index and CSI 2000 Index [9][10]. Performance Evaluation and Calculation - The guidelines specify that performance benchmarks should be calculated based on daily returns and time-weighted principles, ensuring consistency and comparability with fund performance [14]. - The guidelines also emphasize the importance of various performance indicators, such as tracking error and excess returns, to monitor deviations from benchmarks [13][14]. Impact on the Industry - The standardization of performance benchmarks is expected to reshape the industry ecosystem, enhancing the overall quality of public funds and improving investor experience [16][17]. - The guidelines are seen as a crucial step in promoting transparency and discipline within the fund management industry, aligning with the principle of fiduciary duty [16][17].

Core Viewpoint - The public fund industry is experiencing a wave of adjustments regarding performance benchmarks, with nearly 80 funds changing their benchmarks since the beginning of the year to better reflect risk-return characteristics and improve comparability with performance benchmarks [1][3][4]. Group 1: Adjustments in Performance Benchmarks - As of May 20, 2023, around 80 public funds have changed their performance benchmarks, significantly higher than in previous years [3]. - Fund companies are adjusting benchmarks to scientifically and reasonably evaluate fund performance [4]. - The adjustments mainly fall into three categories: 1. Significant changes in the weight of indices within the benchmark [6]. 2. Updating the main weights in thematic fund benchmarks [6]. 3. Complete overhaul of the performance benchmark [6]. Group 2: Regulatory Environment - The regulatory framework is evolving, with plans to establish a "benchmark library" to standardize the setting of performance benchmarks [9][12]. - The "Action Plan for Promoting High-Quality Development of Public Funds" emphasizes the constraint role of performance benchmarks, indicating that more funds will actively adjust their benchmarks [7][10]. - Regulatory measures will include strict oversight of the establishment, modification, disclosure, and ongoing evaluation of performance benchmarks [11]. Group 3: Challenges and Future Directions - Fund companies face challenges in selecting appropriate benchmarks that accurately reflect their investment strategies and styles [14][15]. - There are concerns that standardizing performance benchmarks may limit innovation in fund products [13]. - Future adjustments will require fund companies to manage benchmarks more effectively and establish regular evaluation mechanisms to ensure alignment with actual investment strategies [14].