Investigation On "Liquidation Tide" Of Public Offering: The Number Of Liquidation Has Increased By 152%, And Small And Micro Funds Are Struggling

Public funds ushered in a wave of liquidation.

According to the statistics of 21st century economic reporter, 116 public funds have been settled in 2021, far higher than 46 in the same period of last year, with a year-on-year increase of 152%.

Different from the previous liquidation of bond funds, the number of equity funds in this year's liquidation has increased significantly.

A person from a public fund in South China believes that there are two main reasons for the fund liquidation. One is that the performance is not good, the low net value causes investors to leave the market, and the decline in scale triggers the termination conditions of the fund; The other is that there is no stable sales channel, and the fund pool is not successfully selected into the high-quality channel. He judged that there are still a certain number of mini funds (i.e. reaching the RMB 50 million liquidation red line), and the fund liquidation tide may continue in the future.

Voluntary liquidation appears

Market shock intensified, public funds ushered in a small peak of liquidation.

As of June 17, 2021, from the perspective of the maturity date of funds, 116 public offering fund products have been declared liquidation this year.

In fact, this is the second year since 2015 in the number of funds that have entered liquidation in the same period, second only to 2018. The year of 2018 is the peak of fund liquidation, with 428 funds for fund liquidation in the whole year.

In terms of classification, the most liquidation funds are medium and long-term pure debt funds. The rest of the liquidation funds also include flexible allocation funds, partial debt hybrid funds and passive index funds.

As for the reasons for the liquidation, most of them triggered the termination of the contract. For example, CICC Ruikang announced that as of June 15, 2021, the net asset value of the fund was less than 50 million yuan for 50 consecutive working days. If the above termination conditions specified in the fund contract are met, the fund will enter into the fund property liquidation procedure in accordance with the provisions of the fund contract, and there is no need to hold a general meeting of fund unitholders.

There is also a notice that when the contract comes into effect for three years, the net asset value of the fund is less than 200 million yuan, and the contract is automatically terminated.

However, there are also cases such as Yinhua multi income fund, which have been approved by the general meeting of shareholders and have chosen to wind up voluntarily.

From the perspective of fund companies, there are 116 liquidation funds involving 46 fund companies, among which the largest number of fund companies in China Southern Fund Company is 13, becoming the "king of fund liquidation" in the first half of 2021.

Among the liquidation products of China Southern Fund, 10 of them decided to terminate the liquidation by holding a general meeting of fund unitholders due to their active choice.

The only three funds that trigger the termination of the contract are the regular opening of South Ronghuan, the reform of state-owned enterprises in southern China a and the one-year-a of Southern poly.

A person from a fund company in Guangzhou said that generally speaking, some fund products lacking long-term performance and characteristics are easy to be marginalized, and the scale is getting smaller and smaller, which triggers the termination conditions. And a large number of active liquidation, most of the reason is because the survival of the fittest products, so that resources are concentrated in better products.

CCB fund company and China Merchants Fund Company followed closely, with 6 in liquidation, 5 in Chuang Jin Hexin company and 5 in South China.

Serious industry differentiation

Since this year, two products of Kaishi fund, kaishichun industry selection a and kaishihan industry selection a, have been successively wound up.

In addition to the two funds to be wound up by Kaishi fund in 2020, up to now, half of the eight funds issued by Kaishi fund have been wound up. Moreover, the longest time for the four funds to be wound up is less than three years. Two of them were established in 2019 and will soon be wound up.

According to the public data, Kaishi fund was established in May 2017. Chen Jiwu, the legal representative and chairman of the company, was once the deputy general manager of Fuguo fund. In 2009, he founded Shanghai Kaishi Yizheng Asset Management Co., Ltd. and returned to public offering from private placement in 2017, and established Kaishi fund with all natural person shares.

This year's liquidation of kaishichun industry selection is the first product established after the "private to public" of Kaishi fund. At the beginning of the establishment of the fund in July 2018, the scale of the fund was 341 million yuan.

However, it has been running for no more than two years. In June 2019, kaishichun industry selection released an announcement that the net asset value was continuously lower than 50 million yuan.

According to the third-party data, the performance returns of kaishichun in 2019 and 2020 are 14.3% and 32.33%, respectively, lower than the average return of equity funds.

At the same time, the selected investor structure of kaishichun industry is also constantly changing. When it was first established in 2018, its institutional investors accounted for 52.26%, more than individual investors. By 2020, institutional investors have all withdrawn, and individual investors have accounted for 100%, which has become a thorough retail base.

After the completion of the liquidation, the overall management scale of Kaishi fund company is still 847 million yuan, ranking 136th among 145 public fund companies.

Yang Delong, managing director and chief economist of Qianhai open source fund, said that when the fund was issued cold, old funds, especially some small and micro funds, faced Redemption Risks, which led to the liquidation of related funds. To some extent, it also showed that the overall market trend was low and the fund industry was seriously differentiated.

Channels accelerate the survival of the fittest

A person in charge of product sales of China CITIC Securities believes that the survival of the fittest trend of fund products is accelerating in recent years.

"The products raised by Dagong are sold on a commission basis." He said that in the past, the incentive policy for selling small and micro funds on a commission basis was more advantageous than that of large public offering products, but now the sales volume of big public offering and star fund managers is better, so the attention paid to small and micro funds is less.

Banks are the main channel for fund sales on a commission basis. According to relevant bank personnel, banks also have monthly or quarterly arrangements in selecting funds to sell on a commission basis. They will decide which funds can be sold in the pool according to the fund's future investment and research ability.

According to its disclosure, both state-owned banks and joint-stock banks are increasingly inclined to cooperate with large and medium-sized fund companies to select star fund managers to issue products, and some banks directly bind the resources of head fund companies.

At the same time, it is also difficult for small and micro funds to gain recognition and enter their fund pool in the third-party Internet platform and securities companies.

Under this trend, many industry insiders also said that channels have raised the threshold of fund cooperation in disguise, the scale of large fund companies will become larger and larger, and the strong and polarized situation in the public offering industry will be further accelerated. However, when the fund scale is too concentrated in a few companies and a few fund managers, it will affect the excess returns for customers.

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