Behind The Scale Of Public Funds Reaching A New High Of 23.76 Trillion Yuan: The Amount Of Money Has Shrunk, And The Issuance Of Funds Has Been In The Fast Track Of New Product Issuance?

In 2021, the new fund market is still hot.

As of September 29, the issuance scale in the first three quarters of 2021 totaled 2.34 trillion yuan, and more than 100 companies established nearly 1400 public fund products.

Although the issuance scale remained at a high level, the average issuance shares of a single fund decreased significantly, from 4.018 billion shares in January 2021 to 1234 million shares in September.

Not only that, the size of the 10 billion level explosive fund established last year is also shrinking.

Wind data shows that five of the 10 billion hot money funds set up since January 2020 have shrunk by more than 10 billion.

The best way to solve these problems is to increase the strength of new product issuance.

"There are multiple reasons for the continued hot issuance of new products by fund companies, channels and investors. For example, although some of the old products have good performance, the net value of the fund is 2-3 yuan. Retail customers just don't want to buy them. They think that the net value of new products is 1 yuan, which is cheaper." some people in the industry said: "The feeling is to board a high-speed train, fund companies need to continue to issue new funds in order to maintain the management scale and meet the needs of the channel." according to the latest disclosed data, the scale of public funds has reached 23.76 trillion yuan.

New product launch competition

Fund companies are enthusiastic about ETF layout, especially the exploration of innovative varieties.

On August 6, the first VR themed ETF issued by Yinhua Fund in the market -- Yinhua Zhongzheng virtual reality theme ETF (hereinafter referred to as: Yinhua vretf, code: 159786) was listed.

According to the data, Yinhua vretf tracks the CSI virtual reality theme index, which has 50 sample stocks.

According to wind data, as of the end of July 2021, from the perspective of industry distribution, China Securities VR index focuses on hardware equipment and content support, among which optical optoelectronics, electronic manufacturing II, semiconductor and Internet media account for 24.8%, 17.4%, 14.7% and 11.6% respectively.

In terms of the top 10 heavy positions in the index, Ruixin micro, Quanzhi technology, San'an optoelectronics, Baoxin software, goer shares, Hikvision and other VR stocks are included.

"Passive fund products have gone from the previous industry classification to thematic ETF funds." some people in the securities industry said that many ETF funds with different themes may be targeted at CSI300, "what's the significance of issuing so many homogeneous products for investors?"

In fact, in addition to the continuous emergence of segmented industries and thematic ETFs, the issuance of broad base index ETFs is also very crowded. According to the 21st century economic report, there are nearly 20 similar ETF products in the whole market, such as CSI 300 and CSI 500.

As of September 29, the total amount of funds issued in the first three quarters reached 2.34 trillion yuan, with 1387 new funds established.

In particular, in August 2021, newly established fund products reached a new high within the year, with 200 new funds established this month, and 190 new funds in June and September respectively.

In this regard, some people in the industry said that the fund drift problem that the regulators focus on is also related to the internal volume of new funds. For some concept themes without performance support and derivative concept theme funds, fund companies should reduce the issuance of some new products.

The share of hot money is shrinking

It is very difficult for the fund to become popular for a long time.

According to wind data, the size of several hot money funds established in 2020 will shrink significantly in 2021. Statistics show that, of the 42 10 billion hot money funds set up in 2021, the shares of 36 funds have shrunk since their establishment. Among them, 5 have shrunk more than 10 billion.

The high-quality growth fund of ICBC, with a scale of 11.989 billion yuan at the time of its establishment, had a relatively serious shrinkage. However, by the end of the second quarter of this year, the scale of the latest fund was only 3.017 billion yuan, with a decrease of 8.971 billion yuan, accounting for 74.84% of the total.

In this year's structured market, some star fund managers' products are also hard to escape the fate of being redeemed.

According to choice data, the latest scale of Xingquan Yiyi fund managed by Xie Zhiyu, the top fund manager of Xingzheng Global Fund Co., Ltd., has declined compared with the middle of the year.

In addition, huitianfu stable income fund, which was issued on July 23, 2020, has an investment ratio of 0-40% in stock assets, which is a mixed fund with partial debt.

When the fund was issued, it attracted 90200 investors to subscribe, and the establishment scale reached 21.634 billion shares.

However, by 2021, huitianfu's share of stable income funds has been decreasing, and it has shrunk to 7.216 billion shares in the first quarter of this year. At the end of the second quarter, the share of the fund had dropped to 5.152 billion, and the share had decreased by 76.18% since the establishment of the fund.

Some people in the fund industry said that the main reason for the redemption is dissatisfaction with the investment performance, as well as the basic information such as the investment direction, holding period and volatility of the fund not fully understood in advance.

New fund issues continue to be hot

It is difficult to invest in stocks, but it is more difficult to choose funds, because the number of funds far exceeds the number of listed companies.

In the public fund market, the total number of fund products has reached 8673, while as of September 30, the number of Listed Companies in the two cities was 4494.

According to the analysis of senior managers of a fund company in South China, there are three main reasons for issuing new products. First of all, from the perspective of fund companies, fund companies should be responsible for shareholders and create benefits for shareholders. Only with the scale of management can they have profits.

Secondly, from the perspective of channels, because the direct sales of fund companies only account for a small part of the fund scale, and the main service channels for ordinary investors are banks, securities companies and third-party sales agencies. It is also selling funds. If selling new funds makes more money than selling old funds, then the channel is definitely more willing to recommend new fund products.

Especially in recent years, the rise of the third-party channel, ant fund and Tiantian fund. At present, the incremental market of fund sales mainly comes from these third-party sales channels.

Finally, from the perspective of investors, investors like to buy new funds mainly for profit, and it is difficult to change the preferences of fundamentalists for products in a short period of time. This is also a matter of investment philosophy and investment strategy. Some fundamentalists are not mature enough and are more willing to participate in new products.

"From the point of view of investors, buying a fund of 1 yuan, net value to 1.1 yuan, earning 10%, is very simple and clear. Buying products with a net value of 2.8 yuan and increasing by 10% is not so easy to calculate, which is also a simple investment mentality of ordinary investors."

Therefore, at this stage, it is necessary for fund companies and sales channels to work together to strengthen investor education, do a good job in after-sales investment company, and improve investors' understanding of products.