How To Select New Funds From Nearly 4000 Public Funds?

Since mid April, the Shanghai stock index has continued to fall, and the bond market is also in the doldrums. The Treasury bond futures are in an eight successive drop. The yield of the 10 - year treasury bond hit the 3.70% pass.

The accumulation of earnings from public funds was also depleted in this round of decline.

Since the end of 2016, IPO has speeded up its issuance. Under the relatively fixed price earnings ratio, new strategy is a good way to get relatively stable returns.

With the disclosure of Fund Quarterly information and so on, the scale and performance of the new fund can be displayed, but the income of the new fund is also uneven.

Since the regulation stipulates that no new words can be found when the public fund is named, how can we select a new fund in nearly 4000 public funds?

According to Guotai Junan study, the new fund has the following characteristics: first, the new fund type is generally partial debt mix, flexible allocation, balanced mix and part Guaranteed Fund; two, the scale is generally between 300 million -20 billion (a few dozen new funds exceed 2 billion), among which 500 million -10 billion is the most common scale; three is stock assets generally 60 million yuan or 120 million yuan.

Assets accounted for over 70% of the net assets of the fund, four of which were more active in the fight against new shares, and more shares were allocated in the positions, which was an important source of fund returns. Five, the names of the funds were relatively vague, and there was no clear industry or theme.

According to the statistical caliber of Founder Securities, as of April 21st, 358 new funds in the market were knocked out (excluding 8 newly launched 3 new funds and 8 new funds that caused abnormal fluctuations in net value) in the first quarter, and 110 days since early 2017.

Under the scale of 500 million yuan, the average net value of new funds increased by 2.9%, the annual average net value increased by 9.5%; the average net worth of the new fund increased by 1.77% over the scale of 500 million -10 billion, the average annual net growth of 5.78% was increased; the average net value of the new fund increased by 1.5% with the scale of 1 billion -15 billion, the annual average net value growth 4.9%; 1 billion 500 million -20 billion yuan, the average net value growth of the new fund was 1.1%, the annual average net value growth was 1.1%, and the average net value of the new fund increased by more than $8 billion.

"Overall, the performance of the hybrid new fund is still inversely proportional to the scale. The smaller the scale, the less the performance is, the better the performance is below 500 million."

Founder Securities analyst Tang Yawen analysis said that the bond yields continued to rise in April, and the overall performance of the stock market was also weaker than that of the small scale fund which dragged the stock positions larger in the first quarter.

Overall, the new fund in the first 110 days of 2017 is better than last year, but it is weaker than the first quarter level.

The scale of the fund is too small to reach a new threshold; the scale of the fund is too large, and the income allocated to the top purchase is easily diluted and deviated from the optimal arbitrage interval.

How large is the new fund to maximize returns?

Before we look for answers, let's take a look at the mainstream new funds in the market.

There are three main sources: stock bottom income, bond yields and new enhanced revenue.

According to Fangzheng securities statistics, from the split results, as at April 21st, 500 million -10 billion hit the new fund net growth median of 1.79%, of which the stock bottom position contributed about 60%, increased the contribution of about 35%, contributed about 5% of the bond contribution, and 1 billion -15 billion hit the new fund in the first quarter of the median growth 1.36%, of which the stock bottom position contributed 60%, increased the contribution of about 27%, the bond contribution was about 13%.

From a number of fund companies' strategy, the scale of 500 million -10 billion has become the best scale of the new fund.

"It depends on the volatility of the stock market.

Small scale new funds can be used to fill up the new stocks, but the risk is that the stock bottom stock ratio is forced to uplift and the fluctuation rate increases.

A fixed income department in Southern China told reporters that for example, the blue chips have rebounded strongly since the fourth quarter of last year. Some small scale new fund revenue has been good. The contribution rate of the stock bottom warehouse has exceeded the new increase income. This year, the A shares are scattered hot spots and the overall weakness.

From the current fund company's new fund strategy, stock bottom + bond + new enhancement strategy has also become the mainstream strategy.

"The purpose of the new fund is to get a new revenue from the bottom up. Under the current demand for the new 120 million of the bilateral market, if it is a new fund of 500 million scale, the share of the new fund has exceeded 20%. If the fluctuation of the bottom warehouse is too large, it will significantly affect the new strong income."

Guotai Junan Securities analyst Sun Jinju analysis said that in order to achieve the purpose of dispersing risks in the industry, avoid new bottom positions to focus on a particular industry, many new funds to choose.

High rate stocks are used as bottom positions.

According to Guotai Junan Securities statistics, among all the fund companies that issue new products, Penghua Fund has the largest number of new products, more than 30 units, and new total assets of more than 40 billion (net assets over 30 billion), accounting for 10% of all new fund products.

In addition, Huaan, the south, merchants, Cathay Pacific, Bank of China, GF, Yi Fangda, Tianhong, and Anxin fund companies ranked the top of the new fund. The total assets of the single fund company's new fund category are basically over ten billion. These top ranked funds have accounted for nearly 40% of the new fund scale on the market, and the whole new fund market concentration degree is relatively high.

However, recently, with the intensive issuance of regulatory documents of the CBRC, the off balance sheet financing funds have become the key regulatory targets, and the outsourcing business has been deeply affected. Some of the funds from the new fund are from outsourcing funds, and some fund companies have redeemed large scale new funds.

"After all, the new fund is different from the outsourcing products of the bonds, and the clients still prefer to get part of the proceeds from the relatively stable income of the equity sector."

Tang Yawen thinks.

Huachang securities also put forward a similar view: "on the one hand, tighter regulation is a major trend. Outsourcing will continue to face the pressure of redemption. Some new funds corresponding to outsourcing funds will be reduced or even liquidated. Unless there is a large-scale redemption, of course, the overall impact will be limited."

Huachang securities bond team analysis said that the contraction of the new fund size, the stock market itself, the proportion of shares is not high, and generally do not sell bottom positions, little impact; for the bond market, it may have an impact, but the impact of the relative redemption of the bond outside the Commission is much smaller.

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