Core Viewpoint - The recent reform in the public fund industry emphasizes performance, leading to potential salary reductions for nearly a thousand fund managers due to underperformance against benchmarks over the past three years [1][8]. Fund Performance and Salary Reform - According to the new regulations from the Asset Management Association of China, fund managers whose products underperform benchmarks by more than 10 percentage points and have negative profit margins will see their performance pay cut by at least 30% [1][8]. - As of December 11, 2023, out of 9,429 funds with performance data over the past three years, 1,625 funds underperformed their benchmarks by over 10 percentage points, with 55 funds lagging by more than 50 percentage points [1][8]. - Notable underperforming funds include Guangfa High-end Manufacturing A, Founder Fubon Innovation Power A, and CITIC Construction Investment Low Carbon Growth A, which underperformed by -81.11%, -73.54%, and -69.12% respectively [1][8]. Specific Fund Analysis - CITIC Construction Investment Low Carbon Growth A, managed by Zhou Ziguang, has a total fund size of 542 million yuan and has underperformed its benchmark by 69.12% over the past three years [2][9]. - Zhou Ziguang also manages CITIC Construction Investment Smart Internet of Things A and CITIC Construction Investment Smart Life A, which have underperformed by 65.51% and 54.26% respectively, with a combined fund size of 841 million yuan [2][9]. - The top holdings of CITIC Construction Investment Low Carbon Growth A have shown significant volatility, with major stocks like KOTAI Power and Weichai Heavy Industry experiencing declines of -24.96% and -23.15% respectively, while others like Sunshine Power and Deyang Co. achieved gains over 20% [2][10]. Manager Profile and Future Challenges - Zhou Ziguang has a master's degree and has been in the securities industry since January 22, 2010, with 8.55 years of investment management experience [5][13]. - Despite some periods of positive returns, such as a 26.97% gain over six months, the fund has also faced a maximum six-month return drop of -41.47%, indicating high volatility [7][15]. - The new salary regulations pose a significant challenge for managers like Zhou, who must optimize strategies and manage portfolios effectively to improve performance and meet benchmarks [7][15].

Core Viewpoint - The China Securities Investment Fund Industry Association has revised the "Performance Assessment Management Guidelines for Fund Management Companies (Draft for Comments)", proposing a tiered performance salary adjustment mechanism for active equity fund managers, which may lead to significant salary reductions for underperforming managers [1][4]. Group 1: Performance Assessment Guidelines - The guidelines require fund management companies to establish a tiered performance salary adjustment mechanism based on the past three years' performance benchmarks and fund profitability [1]. - Fund managers whose products underperform the benchmark by more than 10 percentage points and have negative profitability should see their performance salaries decrease by at least 30% [1]. - For those with underperformance exceeding 10 percentage points but positive profitability, their performance salaries should also decrease [1]. Group 2: Longsheng Fund Performance - Over 40% of Longsheng Fund's active equity funds have underperformed their benchmarks over the past three years, with several managers facing potential salary reductions [2]. - Specifically, 13 active equity funds managed by Longsheng have underperformed their benchmarks by at least 10 percentage points in the last three years [4]. - For instance, the Longsheng Electronic Information Theme Mixed Fund, managed by Zhu Lu, has a three-year return of -1.56%, lagging behind its benchmark by nearly 42 percentage points [4]. Group 3: Fund Manager Salary Implications - Fund managers of Longsheng's underperforming funds may face salary cuts of over 30% according to the new guidelines [4]. - Conversely, fund managers whose funds significantly exceed performance benchmarks and maintain positive profitability may see reasonable increases in their performance salaries [5]. - For example, the Longsheng Urbanization Theme Mixed Fund, managed by Dai Yi, has nearly doubled its returns, outperforming its benchmark by 83 percentage points over the past three years [5]. Group 4: Longsheng Fund Overview - Longsheng Fund, established on March 26, 1999, is one of the earliest fund management companies in China and was among the first to obtain national social security fund management qualifications [5]. - As of the end of Q3 this year, Longsheng manages a total of 970.48 billion yuan across 73 products, with a significant drop in its ranking among peers [5]. - The fund's asset allocation shows a predominance of bond funds (51%) and money market funds (35%), while equity funds only account for 13% of the total [5].