Core Viewpoint - The Chinese public fund industry is undergoing a historic transformation with the introduction of the "Action Plan for Promoting High-Quality Development of Public Funds" by the China Securities Regulatory Commission, which includes 25 specific reform measures aimed at prioritizing investor interests and enhancing industry quality [1] Group 1: Reform Measures - The plan emphasizes the establishment of a mechanism linking fund company income to investor returns, requiring a floating management fee structure based on fund performance for investors meeting certain holding period requirements [2] - It mandates that leading fund management firms issue floating fee rate funds that account for no less than 60% of their actively managed equity fund issuance within the next year [2] - The plan also strengthens the regulatory oversight of performance benchmarks used by fund companies, ensuring they effectively define product positioning, clarify investment strategies, and measure performance [2] Group 2: Performance Evaluation - Fund companies are required to establish a performance evaluation system centered on fund investment returns, reducing the weight of operational metrics like scale ranking and profit [2] - The evaluation metrics for fund investment returns will include both fund performance and investor profit/loss, with long-term performance assessments (over three years) accounting for at least 80% of the evaluation [2] Group 3: Addressing Industry Issues - The plan aims to address the prevalent issue where fund companies profit while investors incur losses by incorporating investor profit/loss into performance evaluation metrics [3] - It highlights that many investors tend to buy funds during market peaks, often leading to significant losses when the market turns, exacerbated by aggressive marketing tactics from fund companies [3] - The long-term performance of many thematic funds has shown overall losses, indicating a need for better alignment of interests among all parties involved in fund investment [3][4] Group 4: Stakeholder Interests - The interests of fund companies, fund managers, sales institutions, and investors have historically been misaligned, with a focus on sales rather than investor outcomes [4] - The implementation of the action plan is expected to better align the interests of all parties involved in fund investments, potentially leading to a more stable and sustainable industry [4]