Regulatory Combination To Control The Variables In The Evaluation Mechanism Of "Redeeming The Old And Buying The New" Channel Sales Of Public Funds

The old problem of "redeeming the old and buying the new" in the public offering industry is attracting the attention of the regulatory authorities.

According to the reporter of the 21st century economic report, recently, the regulatory authorities required fund managers to timely report the equity products with a single channel's share of more than 100 million and the net redemption scale of the channel exceeding 40% within six months after its establishment.

"The requirements are mainly for fund products with a stock investment ratio of more than 60% as agreed in the contract, excluding ETF and lof," a large-scale public offering fund told the 21st century economic report.

This requirement refers to the problem of "redeeming the old and buying the new" which has been criticized by the public fund industry.

"This measure is also to urge the institutions to change their business philosophy, further improve the quality of industry development, so as to facilitate the regulatory authorities to timely grasp some behaviors of the industry, such as redeeming the old and buying the new, valuing the first product launch but neglecting the continuous marketing," a person close to the regulatory agency told the 21st century economic news.

The regulatory level is launching a series of measures to "redeem the old and buy the new". Visual China

There are many problems in "redeeming the old and buying the new"

In recent years, the scale of public funds has risen, the amount of money burst frequently, and the popularity of new funds has not decreased, but the phenomenon of redeeming the old and buying the new still exists.

According to the agency's prediction, the overall public offering fund is still in the game state of redeeming the old and buying the new stock in the near future.

According to the research of Anxin securities, from May to July, the newly issued shares of public offering funds were about 514.5 billion, and the total redeemed shares were about 400 billion. Considering that the net value of the redeemed shares was generally higher than the newly issued shares, the overall public offering funds were expected to be in the stock game state.

China Merchants Securities pointed out that, judging from the issuance in August, residents' enthusiasm for buying funds has not decreased. But since this year, the market style is obviously different from the past two years, and the fund redemption pressure still remains with considerable investment returns. Therefore, the issuance and redemption of comprehensive funds, public funds are still in the stock game state of "redeeming the old and buying the new".

Wind data shows that as of September 23 this year, the number of public funds issued has reached 2.21 trillion, with 1431 funds issued, with an average share of more than 1.7 billion.

However, after the establishment of many new development funds, there has been a considerable reduction in scale.

By the end of the first half of this year, the scale of funds established in the first quarter of this year, such as Xinhua industry leading theme, financing value trend, shenwanlingxin value selection and Jiutai Jiuyuan quantification, has reduced by more than 50% by the end of the first half of this year.

"The Matthew effect in the industry has intensified, and many small and medium-sized fund companies have increased the difficulty in issuing new funds. Some funds may seek help funds to guarantee the establishment, but the help funds often will not be retained for too long," said a person from a public fund company.

"In the future, this measure by the regulatory authorities will also have a greater impact on small companies with unsustainable performance. On the one hand, the issuance cost is high, and on the other hand, the product style is not comprehensive enough, which may lead to the periodic redemption of a certain type of products due to market fluctuations," said the public fund source.

Regulatory combination

The regulatory level is launching a series of measures to "redeem the old and buy the new".

"Before this year's Association's first announcement of the scale of channel retention, there were rumors in the industry that the regulatory authorities were conducting research on issues such as redeeming the old and buying the new," said the public fund source.

On May 13, this year, China Securities Investment Fund Association released the list of sales and holding scale of public funds of sales institutions in the first quarter of 2021, which is also the first time that the Fund Industry Association announced the sales and holding scale of public funds of fund sales agencies.

In the view of industry insiders, publishing the size of fund sales agencies is a guide to the bad phenomenon of redeeming the old and buying the new, shifting the channel focus from fund sales to fund holdings.

"From the perspective of the channel, the initial revenue and assessment mechanism of the channel will inevitably guide the first-line sales channels to pay more attention to the first-line sales," an interview with a large-scale public offering fund in Beijing pointed out.

"In the absence of regulation on conflicts of interest, selling new funds instead of continuing to market old funds aggravates irrational short-term speculation. Attaching importance to new development rather than providing professional advice and choosing long-term investment has become the most economical choice for fund sales agencies. As a result, new funds appear in the short term. However, in the long run, equity fund shares are shrinking and institutionalized It has exacerbated the irrational behavior of chasing up and killing down prices, "said an interview with a fund analyst at a securities firm.

In addition to channel reasons, there are two reasons for redeeming the old and buying the new. From the perspective of industry competition pattern, the competition among fund companies is intensified, forcing all companies to maintain a dense pace of new development in order to maintain market share; And from the perspective of investors, most investors' investment behavior is not very mature and rational. They are eager to increase the investment income through frequent redemption and other means, which reduces the patience of long-term investment.

The voice from the top also shows that regulators are paying close attention to this mess.

In August this year, Yi Huiman, chairman of the China Securities Regulatory Commission, said at the third member congress of the fund industry association that the mutual fund industry adheres to the priority of the interests of the holders, constantly innovates products and services, and has made positive achievements in rewarding and serving investors, but there is still much room for improvement.

"For example, the problems of making money from funds and not making money from the foundation people often occur. Of course, there are some factors of investors themselves, but also the problems of the industry's own development and management concept. It reflects that the scale complex is strong, and marketing is more important than continuous service. Some sales agencies and employees deviate from the interests of customers and induce" redeeming the old and buying the new ". These problems must be solved from the protection of investor cooperation We hope that the majority of fund institutions will consciously adhere to the supremacy of customer interests, revere investors, and realize the growth and growth of the company while creating the maximum value for customers, "said Yi Huiman.

"From the perspective of product layout, fund companies may arrange more products with fixed holding period in the future, and try to suppress the impulse to redeem the old and buy new products at the product supply level. From the perspective of channel cooperation, fund companies will choose more channels with long retention period according to the redemption and retention conditions, and cooperate with the channel side to further improve the sales structure and assessment mechanism Note to retain and retain, and gradually do a good job in the holding of high-performance products, "said a large-scale public offering fund in South China.

"Although there are many new fund issues, recently, many fund companies have increased their investment in continuous marketing," a public fund source told the 21st century economic report.

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