Core Viewpoint - The "Action Plan for Promoting the High-Quality Development of Public Funds" was officially released on May 7, outlining 25 specific measures to guide the future high-quality development of the public fund industry, in line with the directives from the Central Political Bureau and the new "National Nine Articles" [1] Group 1: Development of Public Funds - The plan emphasizes increasing the scale and stability of equity investments in public funds, promoting various onshore and offshore index funds, and developing theme-based stock index funds aligned with national strategies [3] - The public fund industry is encouraged to enhance its asset management capabilities to drive innovation in equity funds, with standardized products like ETFs being central to future development [3] - As of April 2025, the company has strategically laid out 46 ETF products, creating a comprehensive toolbox for all-weather asset allocation [3] Group 2: Investment Research and Management - The plan calls for strengthening core investment research capabilities by establishing an evaluation index system for fund companies, encouraging resource investment, and supporting a multi-strategy research system [5] - The company is implementing a "Small Giant Plan" to stabilize fund managers' investment styles and enhance their core competitiveness within their capability circles [5][6] - The company is moving towards an "industrialized" investment system, focusing on modular capabilities and integrating individual expertise into replicable company-wide capabilities [6] Group 3: Performance Evaluation and Fee Structures - The plan highlights the importance of performance benchmarks for fund products, aiming to create a decision-making mechanism that reflects fund managers' investment styles [8] - A long-term performance evaluation system of three to five years is mandated to enhance the stability of public fund investment behaviors and promote balanced capital market financing [9] - The introduction of floating fee rate products linked to fund performance is encouraged to align the interests of fund managers and investors, enhancing investor satisfaction [6]

Investment Rating - The report maintains an "Overweight" rating for the multi-financial sector, indicating an expectation that the sector will outperform the benchmark index [7]. Core Insights - The report highlights the implementation of the "Action Plan for Promoting High-Quality Development of Public Funds," which aims to reform the public fund industry by enhancing governance, product issuance, investment operations, and assessment mechanisms [1]. - The plan emphasizes a shift from a focus on scale to prioritizing investor returns, with a target to achieve a high-quality development "turning point" within approximately three years [1]. - The industry is expected to undergo a transformation, moving from a "scale competition" model to one that values "performance," leading to increased concentration among leading firms and differentiated competition [1]. Summary by Sections Investment Fee Reform - The plan introduces a floating management fee mechanism linked to fund performance, aiming to reduce investor costs and enhance transparency in fee structures [2][11]. - It mandates that leading institutions issue at least 60% of their actively managed equity funds as floating fee products within the next year [2][11]. Long-Term Assessment and Incentive Mechanisms - The reform requires that performance indicators for fund managers and executives have significant weight in assessments, with long-term performance being a key focus [3][12]. - The plan aims to enhance the evaluation system by increasing the weight of long-term performance metrics and investor outcomes in the assessment criteria [3][12]. Equity Investment Growth - The report stresses the need to boost the scale and proportion of equity investments within public funds, promoting innovative products that align with performance and investor returns [4][19]. - It outlines plans for expedited registration processes for various equity fund types, including ETFs and actively managed funds [4][19]. Market Consolidation and Institutional Development - The plan supports market-driven mergers and acquisitions among fund companies, aiming to enhance the capabilities of leading institutions while fostering differentiated development for smaller firms [5][18]. - It emphasizes the establishment of a first-class investment institution through improved product development and research capabilities [5][18]. Investor Service Enhancement - The report highlights the importance of improving investor services, including the launch of a centralized platform for institutional investors to access public fund investments [17]. - It outlines regulatory measures to promote standardized investment advisory services tailored to investor needs [17]. Overall Industry Outlook - The report anticipates a significant restructuring of the public fund industry, with a focus on long-term performance and investor-centric strategies, which is expected to reshape the competitive landscape [1][18].