Core Viewpoint - The article emphasizes the reform of the assessment and incentive mechanisms for public funds, focusing on performance, long-term results, and benchmarks to achieve long-term stable excess returns. It suggests that the long-cycle assessment based on benchmarks will promote the indexation process in the industry, highlighting the importance of allocating to weighted stocks [1][3]. Group 1: Regulatory Changes - On May 7, the China Securities Regulatory Commission (CSRC) released the "Action Plan for Promoting High-Quality Development of Public Funds," which proposes reforms to the assessment and incentive mechanisms for fund companies, emphasizing performance, long-term results, and benchmarks [1]. - The previous regulations required fund managers to disclose the reasons for selecting performance benchmarks, allowing modifications to the benchmarks under certain conditions [1]. Group 2: Overseas Fund Assessment Mechanisms - The design goals of overseas fund assessment mechanisms aim for long-term stable excess returns, characterized by benchmarking, long-term focus, and diversification [2]. - Benchmarking: The U.S. and European fund industries use benchmark performance indicators as tools for evaluating fund managers, with the U.S. introducing AIMR-PPS in 1993 and GIPS in 1999 for global standards [2]. - Long-term focus: U.S. fund institutions have extended assessment periods from short-term (1-3 years) to medium-long term (5-10 years), with many companies now providing five-year returns [2]. - Diversification: The assessment indicators have diversified to enhance return stability and meet ESG goals, incorporating risk-adjusted metrics and ESG performance into the evaluation system [2]. Group 3: Recommendations for China's Fund Industry - China's fund industry can learn from overseas experiences to establish a long-cycle assessment incentive mechanism based on benchmarks [3]. - In terms of performance benchmarks, the U.S. uses a single, converging benchmark (S&P 500) for easier comparison, while Europe employs more diversified indices like MSCI for differentiated development [3]. - The long-cycle assessment mechanism exemplified by T. Rowe Price links fund manager evaluations to 1, 3, 5, and 10-year performance, while Amundi focuses on long-cycle risk-adjusted performance, integrating ESG metrics into the assessment system [3]. - Under the new regulatory framework, it is recommended to focus on opportunities in index-weighted stock allocations, as the situation of significantly underperforming funds relative to benchmarks is expected to improve [3].

Core Viewpoint - The article emphasizes the reform of the assessment and incentive mechanisms for public funds in China, focusing on performance, long-term results, and benchmarks as key elements for high-quality development [1][3]. Group 1: Regulatory Changes - On May 7, the China Securities Regulatory Commission (CSRC) released an action plan aimed at promoting high-quality development in public funds, which includes reforming the assessment and incentive mechanisms for fund companies, personnel, and products [1]. - The new regulations require fund managers to disclose the reasons for selecting performance benchmarks and allow for modifications to these benchmarks under certain conditions [1]. Group 2: International Practices - The design goals of overseas fund assessment mechanisms focus on achieving long-term stable excess returns, characterized by benchmarking, long-term perspectives, and diversification [2]. - In the U.S. and Europe, performance benchmarks are used as evaluation tools for fund managers, with the U.S. introducing the AIMR-PPS in 1993 and the GIPS standards by CFA in 1999 to establish global benchmarks [2]. - The assessment periods in the U.S. have shifted from short-term (1-3 years) to medium and long-term (5-10 years), with firms like JPMorgan incorporating 10-year performance metrics [2]. Group 3: Recommendations for China's Fund Industry - China's fund industry can learn from international experiences to establish a benchmark-based long-cycle assessment and incentive mechanism [3]. - The U.S. uses a single, converging benchmark (S&P 500) for easier horizontal comparisons, while Europe employs a more diversified approach with indices like MSCI for differentiated development [3]. - The article suggests focusing on index-weighted stock allocation opportunities under the new regulatory framework, as the performance of actively managed equity funds is expected to align more closely with benchmarks [3].