Performance Failed To Meet Expectations 90% Of The 10 Billion Hot Money Fund Was Net Redeemed

With the disclosure of the fourth quarter report of the fund in 2020, the "embarrassment" of a number of star fund managers' funds suffering from net redemption in the fourth quarter has been exposed.

They include Cao Mingchang, Wang Zonghe, Liu Gesong, Mao Wei, Hu Xinwei, Yuan Fang, etc.

The funds managed by these fund managers have attracted much attention in the market for their "money explosion".

According to the statistics of the 21st century economic report, there are 20 open-ended active equity funds with a total share of more than 10 billion shares, which were established in the first three quarters of 2020 (A / C combined calculation, the same below). Among them, 18 new 10 billion level funds were net redeemed in the fourth quarter, accounting for 90%.

Behind this data, there is a new operational trend in the public fund industry.

Net redemption "list"

According to wind data statistics, among the 10 billion level active equity funds newly issued in 2020, the highest net redemption share in the fourth quarter of 2020 is southern growth pioneer (fund manager Mao Wei, Wang Bo), with a net redemption of 8.566 billion yuan, including 1.124 billion yuan of class A shares and 7.432 billion yuan of class C shares.

If we only count the redemption data, the total redemption of the two types of shares is 9.3 billion, about 10 billion yuan.

The southern growth pioneer fund was established on June 12, 2020, with a total share of 32.115 billion yuan.

The second largest net redemption of 10 billion active equity funds in the fourth quarter was Hua'an Juyou selection (fund manager Rao Xiaopeng), with a net redemption of 8.442 billion yuan in the fourth quarter of last year. The fund was established on July 16, 2020 with a total share of 29.067 billion yuan.

In the fourth quarter, the third top 10 billion level fund was huitianfu mid cap value selection (fund manager Hu Xinwei), with a / C net redemption of 6.348 billion yuan.

The fourth largest net redemption in the fourth quarter was e fund balanced growth stock managed by Chen Hao. In the fourth quarter of last year, it was net redeemed of 6.014 billion. However, if it is extended to 2020, among the active new funds, this fund's annual net redemption share will be the largest, with the annual share decreasing by 14.595 billion, accounting for - 54.75%. The initial scale of the fund is 26.967 billion, which will be established on May 22, 2020.

It is worth noting that Penghua, managed by Wang Zonghe, also had a net redemption of 3.8 billion yuan in the fourth quarter of last year.

Penghua ingenuity selection was the sales champion of that year. On July 8, last year, the subscription fund of Penghua ingenuity selection managed by Wang Zonghe was 137.1 billion yuan, which set the highest one-day subscription amount at that time, and its total share of issuance was 29.691 billion yuan.

In addition, if we expand the 10 billion level new fund to 5 billion level, there are also some star fund managers issued last year's blockbuster funds, which also suffered large redemptions in the fourth quarter.

For example, Liu Gesong, who won the top three performance of the fund alone in 2019, and the pioneer of Guangfa science and technology under his management, was established on January 22, 2020, with a total issuance share of RMB 7.9 billion, and a net redemption of RMB 2.349 billion occurred in the fourth quarter of last year.

"The redemption of well-known funds, I think the main reason is the performance. Maybe because the performance did not meet the expectations of investors, redemption occurred. In fact, the emergence of explosive funds reflects that investors have high expectations for fund managers. Once the expectations are not met, investors may be disappointed. " Yang Delong, manager of Qianhai open source fund, said.

Taking China Europe Hengli (hereinafter referred to as "China Europe Hengli") managed by Cao Mingchang as an example, according to the fourth quarter report of 2020 published on January 22, the net return rate of fund share of China Europe Hengli in the fourth quarter of 2020 is only 2.38%, while the benchmark yield of performance comparison in the same period is 8.30%. China Europe Hengli's earnings seriously underperformed the performance benchmark.

It is worth mentioning that in the whole of last year, the return of China Europe Hengli was only 8.51%, and the cumulative return of more than three years since its establishment was 12.33%.

On November 2, 2020, after three years of its establishment, the foundation people choose to vote with their feet. As of December 31, 2020, the fund size of China Europe Hengli has dropped to 431 million yuan, which is 94% lower than that of 7.441 billion yuan when it was established on November 1, 2017.

"Performance + channel" sales shrink

China Europe Hengli interprets a typical story about the shrinking of popular money.

In that year, new funds were difficult to sell in the market, but China Europe Hengli was sold out in a day, with a sales volume of 7.4 billion yuan. As a three-year closed-end fund, it ranked first in the list of partial equity funds with the largest scale established in 2017, and became a hot money fund at that time.

After China Europe Hengli was bought and sold, it was the foundation people who went to Cao Mingchang, the fund manager.

Cao Mingchang entered the fund industry in 2006 and served as the investment director of Xinhua fund. He joined the China Europe Fund in June 2015 and has 10 years of excellent performance, which is known as "the first brother of China EU value".

Contrary to the high expectations of the fundamentalists, November 2, 2020 is the first open day of China Europe Hengli. The China Europe Hengli managed by Cao Mingchang handed in 11.72% of the income report card, with an annualized yield of only 3.77%. The benchmark yield of the same period was 14.17%.

Although the performance is not good, the management fee of China Europe Hengli is 1.50% per year. According to the calculation, in the three-year closed period, the manager of China Europe Fund collected a total of 333 million yuan; the custody rate of China Europe Hengli was 0.25%, and in the three-year closed period, China Merchants Bank, the trustee, collected 55 million yuan of custody fee.

This also makes the foundation people can only vote with their feet and choose to redeem them in a large scale.

If you look at those funds that have been heavily redeemed, most of them are facing similar problems. For example, e fund, the new active equity fund that was most redeemed last year, grew evenly. After its establishment on May 22, last year, its performance as of the end of the third quarter of last year was 3.5%, and the fourth quarter received a net redemption of 6 billion yuan.

For example, Penghua ingenuity selection C managed by Wang Zonghe had a negative profit of - 0.56% from its establishment on July 10, 2020 to the end of the third quarter of last year. In the fourth quarter of last year, the fund suffered a net redemption of 3.8 billion yuan.

For example, in the fourth quarter of last year, the southern growth pioneer managed by Mao Wei and Wang Bo had the highest net redemption share, with a net redemption of 8.566 billion yuan. Its revenue from its establishment in the middle of June last year to the end of the third quarter of last year was 0.73%. In the fourth quarter of last year, it encountered a net redemption of 8.5 billion yuan.

Yang Delong pointed out that "don't blindly pursue hot money funds, or look at today's fund performance objectively and rationally. It's not to say that the performance of fund explosion funds must be better. Investors should look at which fund managers are value investment and which fund managers have better long-term performance from a longer-term perspective, so they should not blindly pursue blockbuster funds."

However, in addition to the investors' expected return on the fund, the industry believes that some fund redemption and channels also have a certain relationship.

A fund manager said: "according to my personal observation, the fund with more fund redemption is related to the channel when the fund was issued. Some banks with low fund retention rate tend to" reverse the amount "by continuously marketing the new fund and redeeming the old fund, while the redemption volume of products issued by some channels with high fund retention rate will be less."

"This problem is related to the fact that the existing fund sales are highly dependent on traditional channels, and the channels tend to complete the assessment by encouraging customers to" redeem the old and buy the new "under the heavy pressure of medium income. All these require the role of" fund investment adviser "to carry out continuous" investor education "for fund investors." The fund manager said.