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].

Group 1 - The market experienced a slight adjustment last week, with the brand index closing at 1657.60 points, while several component stocks rose against the trend, including Xinlitai, Tigermed, and Stone Technology [1][2] - Xinlitai led the gains with an increase of 14.96%, followed by Tigermed at 12.48%, and Stone Technology at 11.47%. Other notable gainers included Three Squirrels and Supor, which rose by 7.69% and 6.07% respectively [2] - Since the beginning of 2025, Maimai Biological has seen a significant increase of 51.27%, with Shanghai Jahwa and Xinlitai also showing strong performance with gains of 47.96% and 47.71% respectively [3] Group 2 - Looking ahead, the market is expected to gradually shift towards a more positive trend as investors remain sensitive to favorable factors, with ongoing accumulation of positive elements supporting economic expectations and fundamentals [4] - The current market structure indicates a potential for mid-term positive performance, driven by policy support, domestic technological breakthroughs, and a favorable external environment, which may enhance liquidity in the domestic capital market [4] - In the medium to long term, opportunities may arise in sectors such as domestic demand, technology, and overseas expansion, with a focus on defensive dividend sectors and aggressive technology sectors, including internet and robotics [5]