Core Viewpoint - A new batch of floating management fee rate funds has been reported by 26 fund companies, marking the first such products since the issuance of the "Action Plan for Promoting High-Quality Development of Public Funds" [1][2][11] Group 1: New Fund Products - The first batch of floating management fee rate products was accepted by the CSRC on May 16, with 26 fund managers involved, including 21 leading firms and 4 smaller firms [2][3] - Most of the reported products are mixed funds, with a focus on protecting investor interests and guiding long-term investments [2][3][11] Group 2: Action Plan Details - The "Action Plan" establishes a floating management fee mechanism linked to fund performance, with different fee rates based on the fund's performance relative to benchmarks [3][11] - The plan aims for leading firms to issue at least 60% of their active management equity funds as floating management fee products within a year [3][11] Group 3: Historical Context - The concept of floating management fee products dates back to 1999, evolving significantly over the years with various models introduced [4][5][6] - Recent innovations include a dual floating fee structure and performance-based fee adjustments, enhancing the alignment of management fees with investor outcomes [8][9][10] Group 4: Industry Impact - The introduction of these new products is seen as a significant step towards optimizing the fund supply side, potentially leading to better long-term returns for investors [10][11] - The new fee structures are designed to encourage long-term investment and reduce irrational trading behavior among investors [11]

Core Viewpoint - The recent regulatory changes in the public fund industry signify a major shift towards performance-based fee structures and a focus on net asset value, marking the end of the "easy profit" era for actively managed equity funds [4][5][6]. Summary by Sections Regulatory Changes - The "Action Plan for Promoting High-Quality Development of Public Funds" targets the reform of floating fee rates and performance assessments for equity funds, indicating a significant overhaul of investment strategies [4][6]. - The new floating fee structure links management fees to performance against benchmarks, with penalties for underperformance and incentives for exceeding benchmarks [6][7]. Fee Structure Details - Under the new rules, management fees for funds that underperform by more than 3% compared to benchmarks will be reduced to 0.6%, while those that exceed benchmarks by 6% can increase fees to 1.5% [6][7]. - The average return of equity mixed funds was reported at 12.32%, with only 26.9% of funds outperforming their benchmarks by 6% [7]. Performance Assessment - The new regulations emphasize long-term performance, requiring that at least 80% of performance assessments for fund managers be based on returns over three years [10][11]. - The focus on benchmarks aims to correct previous issues of risk management and style drift among fund managers, enhancing accountability [11][12]. Industry Impact - The reforms are expected to lead to a significant reshaping of the fund industry, with a potential increase in the allocation towards underrepresented sectors, particularly dividend-paying assets [15][18]. - The new rules also encourage the rapid registration of index funds, which may lead to a surge in their popularity as they align with the new performance-driven focus [17][18]. Competitive Landscape - The changes are likely to benefit leading public fund companies, as the industry moves towards a more concentrated market structure, with the top firms expected to gain a larger share of the market [18][20]. - Smaller fund companies will need to develop differentiated research and investment strategies to survive in the increasingly competitive environment [20].

Core Viewpoint - The recent regulatory changes in the public fund industry aim to enhance the quality of equity funds through floating fee rates and performance-based compensation reforms, leading to a significant reshaping of the market dynamics [1][2]. Fee Rate Reform - The new regulations mandate that actively managed equity funds adopt a floating fee rate model linked to performance benchmarks, effectively ending the previous model that prioritized scale and management fees [2][4]. - Funds that underperform by more than 3% relative to their benchmarks will see their management fees reduced from 1.2% to 0.6%, while those that outperform by 6% or more can increase fees to 1.5% [3][4]. - The average return of equity mixed funds was reported at 12.32%, with only 26.9% of funds outperforming their benchmarks by 6%, indicating increased pressure on fund managers to focus on performance [4][5]. Performance Evaluation and Growth Targets - The new rules also require public funds to increase their holdings in A-shares by at least 10% annually over the next three years, with a focus on boosting the proportion of equity funds, which currently lags behind global averages [5][6]. - The performance evaluation system will now place greater emphasis on long-term returns, with at least 80% of the assessment based on three-year performance [7][8]. Manager Compensation Changes - Fund managers' compensation will be closely tied to fund performance, with significant reductions in pay for those whose funds underperform their benchmarks by over 10% over three years [8][9]. - The new regulations aim to correct past issues of inadequate risk control and style drift by emphasizing the importance of performance benchmarks [9]. Industry Restructuring - The reforms are expected to lead to a major reshuffling in the fund industry, favoring top-performing firms and potentially disadvantaging smaller players who may struggle to adapt [12][14]. - The introduction of a fast-track registration mechanism for ETFs is anticipated to enhance the appeal of index funds, which may see increased demand as a result of the new performance-focused evaluation [12]. Investment Strategy Shifts - Fund managers may increasingly allocate to sectors that are underrepresented in their benchmarks to avoid underperformance, particularly in dividend-paying sectors [10][11]. - The focus on diversified asset allocation and risk management will become more critical, moving away from reliance on past performance of individual funds [9][12].

Core Insights - The first batch of 16 floating management fee rate funds has seen significant interest, with some products reaching their fundraising limits and ending their subscription early [1] - The Oriental Red Core Value Fund achieved a fundraising limit of 2 billion yuan, leading the pack due to strong customer service capabilities from distribution channels like Pudong Development Bank and Oriental Securities [1] - The shift in the public fund industry is moving from a focus on scale to a focus on returns, with only 6 out of 26 products setting fundraising limits [2] Fund Details - The Oriental Red Core Value Mixed Fund was the first to reach its fundraising cap of 2 billion yuan and will no longer accept new subscriptions from June 5 [1] - Other funds in the first batch include E Fund Growth Progress Mixed Fund with a cap of 5 billion yuan, and GF Value Steady Mixed Fund with a cap of 8 billion yuan [2] - As of June 4, the combined issuance of E Fund Growth Progress, GF Value Steady, and Harvest Growth Winning reached 760 million yuan [3] Market Dynamics - Following the Dragon Boat Festival, new floating fee rate products are being launched, indicating a competitive sales environment among distribution channels [6][7] - Institutions are increasingly investing their own funds into floating fee rate funds to demonstrate commitment to investors [9] - The China Securities Regulatory Commission has introduced a plan to promote high-quality development in public funds, emphasizing investor interests and performance-based fee structures [10]

Investment Rating - The industry investment rating is "Overweight" indicating that the industry index is expected to outperform the CSI 300 index by 10% or more over the next six months [4][36]. Core Insights - The non-bank financial index experienced a decline of 1.7% last week, underperforming the CSI 300 by 1.5 percentage points, with both brokerage and insurance indices showing a downward trend [4][8]. - The introduction of floating management fee rate funds is accelerating, which is expected to enhance the investment ecosystem by promoting long-term investment focus and risk-sharing between fund managers and investors [4]. - The insurance sector is seeing a rapid rollout of long-term investment pilot programs, with a total scale of 2.22 billion yuan, which is anticipated to inject more incremental funds into the market [4]. Summary by Sections Market Overview - The Shanghai Composite Index fell by 0.6%, while the Shenzhen Component Index decreased by 0.5%. The CSI 300 index dropped by 0.2%, and the ChiNext Index declined by 0.9% [8][9]. Market Data Tracking - The average daily trading volume of stock funds was 13,901 billion yuan, a decrease of 8.3% from the previous week. The margin trading balance was 1.8 trillion yuan, down 0.3% week-on-week [17]. Industry News - Recent regulatory measures have been introduced to support small and micro-enterprises in financing, focusing on enhancing financing supply and reducing costs [34]. - The first batch of long-term investment pilot programs for insurance funds has been approved, with a total scale of 2.22 billion yuan, indicating a strong commitment to long-term investment strategies [4][34].

Core Viewpoint - The article discusses the introduction of floating management fee rate funds in China, highlighting the new fee structure and the competitive lineup of fund managers involved in this innovative product launch [1][10]. Summary by Sections Floating Management Fee Structure - The new floating management fee structure is based on three main factors: the holding period of the investor, the fund's performance relative to a benchmark, and whether the fund has generated profits [1]. - For short-term holdings (less than one year), the management fee remains at a fixed rate of 1.2% [2]. - For long-term holdings (over one year), there are three scenarios for fee calculation: 1. If the fund outperforms the benchmark (CSI 300 Index) by more than 6%, the management fee can increase to 1.5% [3]. 2. If the fund underperforms the benchmark by 3% or more, the management fee is reduced to a maximum of 0.6% [3]. 3. If the fund performs moderately, the fee remains at 1.2% [4]. - The fee structure aims to simplify understanding for investors and sales channels, with consistent rules across the first batch of floating fee funds [5]. Fund Manager Lineup - The initial batch of floating management fee funds features a strong lineup of fund managers, including experienced veterans and promising newcomers [6][7]. - Notable fund managers include senior executives from various fund companies, such as Wang Mingxu from GF Fund and Luan Chao from Huaan Fund, who are leading the management of these funds [7][8]. - The article highlights the presence of "champion" fund managers, such as Wang Xiaochuan from Yinhua Fund, who has recently gained recognition in the market [8]. Launch Timeline - The first batch of 26 floating management fee funds was approved by the China Securities Regulatory Commission (CSRC) in a remarkably short time frame of six working days [10]. - The initial offering of 16 funds is set to launch on May 27, with varying fundraising periods ranging from June 17 to August 26 [10].

Core Viewpoint - The introduction of the first batch of floating management fee rate funds marks a significant reform in the public fund industry, aiming to enhance high-quality development and attract widespread attention from investors and the industry [1][2]. Group 1: Industry Development - The shift from a fixed management fee model to a floating fee model addresses the limitations of the traditional approach, which has become increasingly inadequate in a volatile market environment [1][2]. - The new floating management fee model links fees to investor holding periods and fund performance, promoting a shared risk and benefit structure between fund companies and investors [2]. - This change encourages fund companies to focus on performance rather than merely expanding scale, marking a return to the core principle of "client asset management" [2]. Group 2: Investor Experience - The floating management fee mechanism enhances the investment experience by allowing investors to see a direct correlation between management fees and fund performance, leading to more rational investment choices [2]. - The model aims to resolve the issue of "funds making money while investors do not," providing a potential breakthrough in aligning interests [2]. Group 3: Challenges Ahead - The promotion of floating management fee funds faces challenges, including potential sales resistance during market downturns due to expectations of declining fees [3]. - The complexity of the fee structure necessitates increased investor education and guidance to improve understanding and acceptance of the new model [3]. - Overall, the introduction of floating management fee funds is expected to drive fund companies to enhance their research and performance capabilities, fostering a long-term investment mindset among investors [3].

Core Viewpoint - The recent submission of a new batch of floating management fee rate funds by 26 fund companies marks a significant development in the public fund industry, emphasizing investor interest protection and long-term investment guidance [1][8]. Group 1: New Fund Submission - On May 16, the first batch of new model floating management fee products was accepted by the CSRC, involving 26 fund managers, including 21 leading firms and 4 smaller firms [1]. - The submitted products are primarily market selection equity funds, benchmarked against major indices such as the CSI 300 and CSI 500 [1]. Group 2: Fund Design and Fee Structure - The new fund designs focus on enhancing investor interests, aligning with the "Action Plan" that establishes a performance-based floating management fee mechanism [2]. - The fee structure allows for different management fee rates based on the fund's performance relative to a benchmark, with lower fees applied when performance is below the benchmark and higher fees when performance exceeds it [2][8]. - The design emphasizes asymmetric adjustments to fees, with more significant reductions when performance lags behind the benchmark compared to increases when performance exceeds it [2]. Group 3: Historical Context and Evolution - The floating management fee rate mechanism has evolved since its inception in 1999, with various models emerging over the years, including performance-linked fees and tiered fee structures [3][4][6]. - Recent innovations include a model where 50% of the basic management fee is performance-based, and another where fees vary based on the investor's holding period [6][7]. Group 4: Industry Impact and Future Outlook - Industry experts believe the new floating management fee funds will enhance the alignment of fund managers' income with investors' actual returns, promoting long-term investment and reducing irrational trading [8]. - The introduction of these funds is seen as a deep optimization of product supply in the industry, potentially leading to clearer strategies and defined risk-return characteristics [8].