Core Viewpoint - The article emphasizes the importance of high-quality development in public funds in China, breaking down investor returns into four dimensions: excess returns (A), benchmark returns (B), investment costs (C), and investor behavior losses (Gamma) [1] Group 1: Benchmark Returns - Long-term average returns for investors are primarily derived from market benchmark returns (β), which are the returns investors earn for taking on market risk. Participation in the market through low-cost tools like index funds can help investors easily access this return [5] - The historical stock return rate in China over the past 20 years is approximately 10%, which is similar to the historical data of the U.S. market [5] - Vanguard, a leader in low-cost β products, has seen its market share grow to 30%, while Fidelity, which previously focused more on α, has only recently started to emphasize β products [5] Group 2: Difficulty in Achieving Excess Returns - The challenge of obtaining excess returns (α) through active management is increasing, as the competition among institutional investors intensifies [9] - Data from Morningstar indicates that the probability of active funds outperforming the index over the long term is low, with a significant decline in the chances of active equity funds beating their benchmarks in the Chinese market [9] Group 3: Impact of Fund Costs - Fund costs are a critical factor affecting investment returns, which can be categorized into explicit and implicit costs. Explicit costs include fees that are clearly disclosed, while implicit costs, such as trading costs during fund operations, are often overlooked [11] - In 2022, 320 equity funds had implicit costs from trading fees exceeding 2%, with an average turnover rate of 1026%, indicating frequent trading that incurs high costs and erodes investor returns [11] - Higher fund costs lead to poorer investor experiences and lower returns, highlighting the need for the industry to focus on reducing these costs to enhance investor experiences [11] Group 4: Investor Behavior Losses - Investor behavior significantly impacts investment experiences, with irrational behaviors like "buy high, sell low" leading to discrepancies between actual returns and fund returns, referred to as investor behavior losses (Gamma) [13] - Morningstar's research shows that investors tend to experience greater return discrepancies in more volatile asset types [13] - Investment advisors can help mitigate these irrational behaviors, potentially increasing client returns by 2.45% annually through optimized investment goals and financial planning [13] - The role of AI in enhancing investment experiences is also noted, as it can improve overall economic productivity and fund management efficiency, thereby increasing β returns and reducing fund costs [13]