Enlightenment From The Rise And Fall Of The New Third Board Funds: Investment Managers Refuse To Be Noisy And Lively In The Short Term

On September 2, the China Securities Regulatory Commission (CSRC) said it would set up the Beijing stock exchange on the basis of the existing selected layers of the new third board.

As soon as the news came out, the whole investment circle was shocked.

From September 2 to September 9, only five trading days, the wind third board selection (881023. WI) index of the selected layer soared by 33.34%. At the same time, the new three board stocks generally rose. The new third board index rose 10.14%, the third board market making index rose 22.33%, and the third board leading index rose 12.06%.

At the same time, the trading volume of the selected layer of the new third board soared, with the turnover of 9.8 billion yuan in four trading days this week (September 6 to September 9), three times that of 3 billion yuan in the same period of last week (August 30 to September 2).

Many investors and investment institutions rush into the new third board again. At the same time, retail investors are also eager to try. However, the new three board investment threshold of 1 million yuan has blocked many retail investors, so the neglected new third board fund has become the object of investors' pursuit again.

"Since the official announcement of the Beijing stock exchange, the confidence of the new third board market is full, the market trading enthusiasm is booming, the daily turnover volume is rapidly increasing, and the market is magnificent." on September 9, Zhou Yunnan, founder of Beijing Nanshan investment, commented on the new third board Market during this period.

Zhou Yunnan said that from now to the early stage of the opening of the Beijing stock exchange, he will put his main energy and funds in the selected layer, firmly grasp the opportunity of the historic curtain call of the selected layer and the rising A-share market. However, after the opening of the Beijing stock exchange, it adhered to the strategy of "looking more at the Beijing stock exchange and making more of the new third board", shifting its investment forward to focusing on the innovation layer and the basic layer.

"In the near future, there will be old funds to enter the selection layer, and new funds will enter the public offering process," Zhou Yunnan said.

warning taken from the overturned cart in front

What kind of market is the new third board? Many investors know little about the new third board.

The new third board, established in 2013, is an over-the-counter market. At that time, under the joint promotion of local governments and financial institutions, the new third board ushered in a high tide of listing, with a peak of 12000 enterprises.

The new third board was once very popular. The market making index of the third board issued on March 18, 2015 was once as high as 2673 points in April of that year. However, by January 2019, the market making index of the third board once fell to around 706 points, with a drop of 75%.

In 2015, the stock market experienced a significant adjustment, and the liquidity of the new third board was continuously affected. The number of listed enterprises decreased to 7280 on September 9, 2021, nearly 5000.

Looking back on the past, Zheng Lichang, general manager of Jiuzheng Capital Management Co., Ltd., said that he hoped that the Beijing stock exchange could put the protection of investors' interests, put strict quality control of enterprises in the first place on the basis of fully relying on the market, and learn from the lessons of the new third board in 2014 and 2015, not to carry out the great leap forward and not to pursue short-term noise and excitement.

Now, when investors are once again attracted by the new third board funds, we look back at the footprints of the past, and we can learn from the past.

For a long time in the past, public funds could only participate in the new third board through special accounts or subsidiary products.

For example, in 2014, Baoying Fund issued the first new third board product in the public offering industry through its subsidiaries. Since then, many fund companies, such as CAITONG, Qianhai Kaiyuan, Jiutai, zhongkewotu, etc., have successively arranged. For example, Jiutai fund has deployed 30 new third board related products; There are 13 CAITONG funds; China Science and technology fertile land fund and BAOYING fund each have 10. At that time, a large number of investors rushed to buy the new third board products.

How hot was the new third board fund?

As of September 8, there were 9504 new third board funds in the market category of private equity funds, according to choice data.

According to the reporter's statistics, among the 9504 new third board private equity funds, 3530 and 4005 private equity funds were established respectively in 2015 and 2016 at the peak, accounting for 79% of the total market.

But soon, the new third board funds fell precipitously. By 2017, the number of newly established funds dropped to only 1530, down nearly two-thirds compared with the previous year.

In 2018, the number of newly established private equity new third board funds further fell to only 161, down 90% compared with 2017; At the lowest point in 2019, there are only three new private equity funds established in the whole year.

In 2020 and 2021, only 29 and 11 new private equity funds will be established. It is different from the peak.

So what is the problem?

As a matter of fact, after 2015, the market experienced a big fall. Private placement of the new third board fund was faced with a lack of liquidity, subject matter stepping on thunder, and stock price plummeted. The new third board fund was deeply set up and suffered a large loss.

Look at those who can find the performance of the new third board fund data can be seen.

According to choice data, among the 9504 privately placed new third board funds, 4690 private placement of new third board funds can be found in choice, accounting for 49%.

Among the 4690 new third board funds, 17 new third board fund units fell by more than 90%.

In addition, there are 169 private equity new third board funds since the establishment of the loss of more than half.

On the whole, there are 1968 new third board funds in the market with losses and 146 zero returns. They account for 45% of the private placement of the new third board funds whose performance can be found.

How crazy was the issuance of the new third board fund in 2015 and 2016, and how miserable it was when the market fell in the next two years, and a large number of investors lost their money.

Zhou Yunnan lamented that it was the "mass destruction" of the extremely falling market.

become fashionable for a time

At present, it is difficult to find the complete data of the year when the new third board fund failed to invest. The reporter selected the private fund with "new third board" in its name, and found that under incomplete statistics, there were 422 liquidation funds (including 249 early liquidation, 79 deferred liquidation and 92 normal liquidation).

However, in fact, after a big fall, 2019 and 2020 ushered in a good time for the whole capital market, and many private equity new third board funds are reviving.

Among the 4690 performance data of private placement of new third board funds in choice, 2576 private placement new third board funds have had positive returns since their establishment, accounting for 55% of the total number of performance funds available.

Looking back, the new third board of private equity fund polarization, loss of the "starved to death", making money and "die".

Taking Nanfang Haihui No.1 as an example, this is a hybrid fund with composite strategy, belonging to the type of entrusted management, which was established in April 2015. Since its listing, its income has reached an astonishing 52.32 times, of which, since this year, it has increased by 60.79%.

At present, there are 446 private placement funds in the market, and the income has doubled since listing, reaching more than 100%; 764 of them got more than 50%, and 2576 had only positive returns.

Since the news that the Beijing stock exchange will be established on September 2, it has stimulated many new third board funds to rise sharply.

Among them, from September 2 to September 8, Tianbao phase 2 rose by 14.91%, Qianhu Jianming No.5 by 14.11%, Binyue growth No.5 by 11.15%, and Zhengxin win win-win No.1 by 10.73%.

In addition, there are 27 private equity new third board funds, the increase of 5% - 10%, 196 only positive returns.

Zheng Lichang hopes that in the future, the Beijing stock exchange can convey certain expectations to the market, and the investment institutions of the Beijing stock exchange can have reasonable expectations and forecasts on the market. On this basis, it is necessary to set up products that match the market characteristics, adopt appropriate investment strategies, and strive to achieve the win-win situation of the market, investors and clients. This is also the basis for the long-term stable development and prosperity of the market.

"History will not be so cruel, but fund companies should keep in mind the principles of full adjustment, reasonable valuation, cautious pursuit of high and long-term price investment," Zhou Yunnan said.

Since 2019, the new third board market has ushered in major reform, and the new third board market has formed a structure of "selection layer innovation layer foundation layer". At the same time, the introduction of a series of reform measures, such as the introduction of the public offering system, the introduction of continuous bidding and board transfer mechanism, has RE activated the new third board market.

And recently announced that the Beijing stock exchange, which will soon be established, will shift the basic systems of the selected layer, and then make a strong shot for the new third board. The whole market is booming again.

As of September 9, there were 7280 listed companies on the new third board, including 66 selected companies.

As early as June 2020, the first batch of six public offering funds that can be invested in the selected tier of the new third board were approved, and then a number of fund companies reported related products.

As of September 9, there were 19 public funds in the market that could be invested in the new third board.

Examination of achievements

More than a year later, as of September 9, 2021, the return of the first six new third board concept funds since their establishment is 18% - 68%.

In the experience of this year's market shock, but also such income, can be regarded as a good result.

Among them, the rich country managed by Yang Dong has grown actively for one year, and since its establishment, dingkai has achieved the highest yield of 67.96%; In addition, the innovation growth of huitianfu managed by Ma Xiang reached 50.48% in one year; China growth select, managed by Lin Jing and Gu Xinfeng, has opened a in six months, with a yield of 45.35% since its establishment.

The public offering of the new third board concept fund stipulates that the market value of the fund's investment in selected stocks of the new third board during the closed period shall not exceed 20% of the net asset value of the fund, and shall not exceed 15% of the net asset value of the fund during the open period.

However, it is worth mentioning that for a long time, most of the new third board concept funds are not really so fond of the new third board.

In practice, the proportion of the new third board concept fund invested in the new third board selected layer is very low. From the perspective of the top 10 heavy positions, Huaxia, China Merchants, huitianfu, Wanjia and other companies have no new third board stocks among the top ten heavy positions of fund products.

However, some funds are investing in the selected layers of the new third board. For example, Wells Fargo, the best performing new three board concept fund, has been actively growing for one year. According to the semi annual report, the fund's fifth largest and sixth largest stocks are Northland and Liancheng CNC, accounting for 4.01% and 3.64% of the fund's assets, Wells Fargo is one of the top ten shareholders of Northland. In addition, the fund also holds 7 selected stocks of new third board, including AI Rong software, Yingtai biology, micro invasive optoelectronics, Yongshun biology, beiteri and Guandian defense.

In addition, huitianfu also holds a number of selected stocks of the new third board in a year of innovative growth. For example, Fujita accounts for 3.28% of the net fund value, Xin'an clean accounts for 3.14%, Liancheng CNC accounts for 2.36%, and Hanbo hi tech accounts for 2%. In addition, there are digital people, Chuangyuan instruments, gashi food, Airong software, Changhong energy, Yingtai biology, etc.

Zheng Lichang believes that at present, no matter whether the public funds are newly established or the stock funds, there are no obstacles to the investment selection layer, and there will be no institutional obstacles to invest in the Beijing stock exchange in the future.

However, Zheng Lichang believes that the characteristics of small size, high risk and poor liquidity of Beijing stock exchange are essentially different from the characteristics of large volume, low risk and high liquidity requirements of public funds. From the perspective of cost-effectiveness, Beijing stock exchange is not the most suitable investment object of public funds. However, we still need to look at the problem from the perspective of development. If the Beijing stock exchange can attract enterprises with good development potential, the future "Alibaba" and "Tencent" in Beijing can also be expected, which will lay a good foundation for risk averse institutional investors such as public funds and insurance funds to invest in Beijing stock exchange.

Zheng Lichang said that, of course, many small and medium-sized public funds have a real demand for dislocation development compared with the head public offering funds. If these institutions give proper tilt to the investment research and product design of the Beijing stock exchange, it will also bring great help to the development of the Beijing stock exchange.

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