Core Viewpoint - The article discusses the recent release of the "Action Plan for Promoting High-Quality Development of Public Funds" by the China Securities Regulatory Commission, emphasizing the need to establish a performance benchmark system for public funds to enhance investor interests and address long-standing issues in the industry [1][4]. Summary by Sections Performance Benchmark Issues - The performance benchmark for public funds has been largely ineffective, with only 26% of over 3,600 actively managed equity funds outperforming their benchmarks over the last three years [2]. - A significant 64% of actively managed equity funds are projected to underperform their benchmarks by over 10% from 2022 to 2024 amid a declining A-share market [2]. Causes of Underperformance - The underperformance of funds relative to benchmarks is attributed to poorly defined benchmarks that do not align with the funds' investment strategies and market conditions [3]. - The industry's focus on asset size over performance has led to a misalignment of incentives, where funds with poor long-term performance still attract investment due to their market positioning [3]. Implications of the New Action Plan - The new regulations are expected to fundamentally change the operational logic of actively managed equity funds, promoting a focus on stable investment returns and value investing [4][5]. - Short-term effects may include increased volatility in the market as funds adjust their portfolios to align with benchmarks [4]. Long-term Trends - The Action Plan is likely to enhance the importance of passive and value investing, with public funds expected to increase their allocation to index products and low-volatility assets [5][6]. - Fund managers will need to adapt their strategies to focus on long-term value rather than short-term gains, leading to a potential decrease in turnover rates and a more stable investment approach [6][7]. Fund Manager Accountability - Fund managers will face performance evaluations based on their ability to meet benchmark standards, with significant implications for their compensation structures [8]. - Some fund managers are expected to align their portfolios closely with benchmarks to secure their positions, while others maintain confidence in their ability to outperform through selective stock picking [9].

Core Viewpoint - The China Securities Regulatory Commission has released an action plan to promote the high-quality development of public funds, emphasizing the establishment of a performance evaluation system centered on fund investment returns, aiming to address the long-standing issue of performance benchmarks being ineffective in the public fund industry [1][5]. Group 1: Performance Benchmark Issues - The performance benchmark is a critical measure for assessing a fund's ability to generate excess returns, yet only 26% of over 3,600 actively managed equity funds outperformed their benchmarks over the last three years [2]. - Some funds have underperformed their benchmarks by over 100 percentage points, highlighting the inadequacy of benchmark settings that do not align with investment strategies and market conditions [2][3]. - The public fund industry has been criticized for a "scale-oriented" approach, where management fees are tied to asset size, leading to a focus on growth rather than performance [3][4]. Group 2: Impact of the New Action Plan - The new action plan is expected to profoundly change the operational logic of actively managed equity products, emphasizing the importance of stable investment returns and value investing [1][5]. - There will be a trend towards aligning fund products with performance benchmarks, potentially leading to structural market fluctuations as funds adjust their portfolios [6]. - The action plan may result in a shift towards passive investment strategies and increased focus on low-volatility, high-dividend products, particularly in the banking sector [6][7]. Group 3: Fund Manager Reactions - Fund managers are now required to pay close attention to performance benchmarks, with significant implications for their compensation based on their funds' performance relative to these benchmarks [9][10]. - Some fund managers express confidence in their ability to outperform benchmarks through stock selection, while others may feel pressured to align their portfolios more closely with benchmarks to secure their positions [10][11]. - The action plan is likely to lead to a decrease in turnover rates among funds, as managers focus on long-term investment value rather than short-term trading [7][8].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) emphasizes the importance of protecting investors, especially small and medium-sized investors, as a core task and political responsibility of the capital market [1] Group 1: Investor Protection Initiatives - The CSRC plans to enhance investor protection mechanisms and build trust in the capital market through collaboration with various stakeholders [1] - The Shenzhen Securities Regulatory Bureau has implemented measures to improve investors' sense of gain, trust, safety, fairness, and happiness [1] Group 2: Financial Returns to Investors - In 2024, listed companies in Shenzhen distributed cash dividends amounting to 2,308 billion yuan, which is ten times the amount raised through equity financing [2] - A total of 271 listed companies in Shenzhen announced cash dividends of 1,762 billion yuan for 2024, with a payout ratio of 39.40% [2] - The Shenzhen Securities Regulatory Bureau encourages stock buybacks, with 251 companies conducting buybacks totaling nearly 15 billion yuan in 2024 [2] Group 3: Regulatory Actions and Enforcement - In 2024, over half of the enforcement cases in Shenzhen involved violations of information disclosure, resulting in penalties totaling 152 million yuan [3] - The bureau has initiated criminal proceedings in 8 cases and has seen 14 cases prosecuted, with 8 resulting in criminal sentences [3] Group 4: Dispute Resolution and Investor Education - The Shenzhen Securities and Futures Industry Dispute Mediation Center has successfully mediated 3,668 cases since its establishment, with a success rate of 56% [4] - The bureau has organized over 55,000 investor education activities in 2024, focusing on key demographics [4] Group 5: Future Outlook - The Shenzhen Securities Regulatory Bureau aims to continue innovating and optimizing investor protection measures to ensure a stable and healthy capital market [5]

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has released an action plan to promote the high-quality development of public funds, emphasizing the enhancement of equity investment scale and proportion in public funds, which is crucial for stabilizing the capital market and better serving the real economy [1][2]. Group 1: Equity Investment as a Focus - The action plan identifies equity investment as a key area for the high-quality development of public funds, aiming to improve the scale and stability of equity investments to support national strategies and economic development [1][6]. - The plan includes multiple institutional arrangements and classification evaluation mechanisms to significantly enhance the weight of equity fund-related indicators in regulatory evaluations [2][3]. Group 2: Innovation in Equity Fund Products - The action plan emphasizes the need for innovation in equity fund products, supporting the development of actively managed equity funds and introducing floating fee rate products linked to fund performance and investor returns [4][5]. - There is a focus on developing various index funds that align with national strategies, with an aim to enrich the product offerings in the market [4][5]. Group 3: Strengthening Long-term Investment - The action plan aims to strengthen the long-term investment capacity in the capital market, facilitating the entry of long-term funds through improved index fund asset allocation functions [6]. - The rapid registration mechanism for stock ETFs is highlighted as a direct measure to facilitate the entry of long-term funds into the market, enhancing liquidity and stability [6][7]. Group 4: Market Dynamics and Investor Engagement - The continuous emergence of innovative products is expected to provide more choices for investors with different risk preferences and investment demands, thereby stimulating market vitality [5]. - The long-term perspective on equity investment is emphasized, suggesting that thorough value research and scientific portfolio management are essential for capturing investment opportunities in China's economic transition [7].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has issued an action plan to promote the high-quality development of public funds, focusing on optimizing the fee structure for actively managed equity funds and enhancing the performance evaluation and compensation mechanisms for fund managers [1]. Group 1: Fee Structure Optimization - The action plan promotes a performance-based floating management fee model for newly established actively managed equity funds, where the fee rate is determined based on the fund's performance relative to a benchmark [2]. - Fund companies are encouraged to issue at least 60% of their actively managed equity funds under this new fee structure within a year [2]. Group 2: Performance Evaluation and Compensation - Fund managers' performance pay will be reduced if their funds underperform the benchmark by more than 10 percentage points over three years [2]. - The action plan mandates that the performance evaluation of fund companies should prioritize investment returns, with at least 80% of the evaluation weight on long-term performance metrics [3]. Group 3: Registration and Sales Mechanisms - A fast registration mechanism for ETFs will be implemented, aiming to complete the registration process within five working days [4]. - A classification evaluation mechanism for fund sales institutions will be established to enhance the issuance and sales of equity funds [5]. Group 4: Investor Services and Product Development - The action plan emphasizes improving services for long-term investors and creating more suitable fund products for personal retirement investments [7]. - It also aims to enhance the flexibility of public fund operations and expand investment strategies to meet diverse investor needs [7]. Group 5: Regulatory Enhancements - The action plan includes measures to strengthen regulatory enforcement and increase penalties for violations, ensuring stricter governance and compliance within the industry [9][10]. - It emphasizes the need for improved governance structures and higher entry standards for fund companies and sales institutions [9].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has issued an action plan to promote the high-quality development of public funds, focusing on the innovation and development of equity fund products [1] Group 1: Fund Product Innovation - The plan actively supports the innovation of actively managed equity funds, aiming to introduce more floating fee rate fund products linked to fund performance and investor returns, encouraging long-term holding [1] - There is a strong emphasis on developing various types of on-exchange and off-exchange index funds, continuously enriching theme-based stock index funds that align with national strategies and development directions [1] Group 2: Market Participation - The CSRC is researching the establishment of pilot products for off-exchange broad-based index funds that facilitate swap operations [1]