New Base Cooling And Sealing Products Are Popular

In the first quarter just ended, the issuance of public funds ushered in the best performance in history, with an overall scale of more than one trillion yuan.

It is worth noting that the overall scale of closed-end funds has increased greatly. Wind data shows that the scale of the first quarter totaled 0.43 trillion yuan, a significant increase compared with the same period last year. Especially in the near future, with the market entering a volatile market, 46 funds in the waiting to be raised from April 5 to May 10 adopted closed-end operation.

In fact, in the booming public offering fund market in recent years, the proportion of funds with closed nature has increased year by year. For fund managers, issuing such products will help them to invest in the long term, avoid the interference of short-term redemption, and have greater opportunities and opportunities to create income. For fund companies and channels, issuing long-term closed-end funds is conducive to the stable income of management fees and commissions of both sides.

However, although closed products sacrifice liquidity, they do not necessarily guarantee that they will get income when they mature. Why are fundamentalists willing to pay?

In the first quarter just ended, the issuance of public funds ushered in the best performance in history, with an overall scale of more than one trillion yuan. -Photo by Gan Jun

New base issues cooling closed products

With the decline of investors' risk preference, the hot scene of new fund issuance began to cool down.

As of March 31, only 119.2 billion shares were issued this month, a sharp decrease of 183.7 billion shares compared with 302.9 billion shares in February, and nearly one fifth of the newly issued fund shares in January.

However, the issuance of closed-end fund products is heating up.

According to the statistics of Dongfang fortune choice, up to now, among the 89 new funds (AC shares are calculated separately) waiting to be issued, 6-month, 1-year to 3-year closed-end products account for a considerable proportion, more than half of them.

Specifically, the three-year holding period of Guofu's competitive advantage is mixed with that of three-year holding period, and the two-year holding period of Youxing Quanhe yuan is mixed. Among them, 21 new funds with one-year term, including Bank of communications Zhaoxiang holding mixed funds and e fund Da Yuexin holding mixed funds for one year.

In addition, the proportion of closed-end funds with the attribute of closed-end funds also continued to rise.

Fixed open fund is a kind of closed-end fund, but it will open redemption regularly, so it can be understood as a special closed-end fund.

At present, most of the closed period of fixed funds on the market is 3 months, 6 months, 12 months, 18 months, 2 years or 3 years.

Jia Zhi, an analyst at Ping An Securities, believes that dingkai fund has two advantages:

First, the regular opening of the redemption mechanism makes the fund share stable in the closed period, and the fund manager can devote all his energy to improving the performance of the fund.

Secondly, by opening the redemption mechanism on a regular basis, the fixed fund can limit the number of time selected by the funders, so as to help investors hold excellent funds for a long time, and then improve the returns of investors.

Jia Zhi said that there is still a large space for development of the dingkai fund.

Unique advantages of closed-end fund products

A person from a fund company in Shenzhen said that the design of holding period and closing period is to "force" the long-term investment of the basic people, reduce frequent irrational operation, and "control your own hands."

In fact, the fund industry has been making money, investors have been losing money.

Especially in 2020, affected by the unilateral rising market, the net value of the fund doubled and the number of fund explosion funds emerged frequently, which led to the influx of a large number of new fundamentalists. However, after the year, the market adjusted greatly, and this group of fundamentalists suffered a severe blow.

For example, Zhang Kun, the fund manager of e fund, which is highly sought after by investors, has managed a blue chip selection scale of e fund of RMB 67.701 billion by the end of 2020, becoming the largest equity fund in the market. Although e fund's blue chip selection has doubled its earnings in the past year, with a range return of 119.96%, 80% of its base people still have losses.

From the analysis of user behavior characteristics of loss, a third-party platform thinks that frequent trading and short holding time are the main reasons for the loss.

The stock customer data provided by a large fund company in South China can prove that there is a positive correlation between the investment period and the profit ratio.

The research of the fund company found that from the perspective of holding time, the customers with negative rate of return account for more than 90% of the stock customers with holding period less than 1 month; with the extension of holding time, the proportion of customers with positive return continues to increase.

It reached the peak in the holding period of 1-3 years, in which the people with a yield of more than 20% accounted for more than 40%, and those with a yield of 0-20% accounted for about 47%.

Among the customers with holding period of 3-5 years, 5-7 years, 7-10 years and more than 10 years, the proportion of positive income remains about 80%.

Among the customers who have held for more than 10 years, more than 60% of the customers have a yield of more than 20%, which fully proves the value of long-term investment.

In addition, the choice of admission time also determines the profit ratio.

Based on the closing price of Shanghai stock index, among the customers who enter the market below 2500 points, the proportion of customers with positive income exceeds 80%; between 2500 points and 3000 points, the data drops to 70%; between 3000 points and 3500 points, the data further drops to about 60%; and when it reaches above 3500 points, the proportion of positive income customers reaches about 40%.

Therefore, in order to improve the investment experience of the foundation people, the fund company said that it would guide customers to hold as long as possible and choose the appropriate time to leave the market; strengthen the establishment of sales capacity at the low point of the market and cultivate new customers at the low point of the market; try to layout products with a certain holding period or closed-end to improve the investment experience of customers.

Closure does not necessarily make money, but it may also kill

Although the long-term closed-end fund has its natural product type advantage, it is not a steady profit.

Some fund investors believe that once they enter the market, they can't get off at any time. If during the closed period, the common style rotation or substantial adjustment of the A-share market appears in the market, the performance of the fund may fluctuate or unfortunately fail, "that is to say, they are killed."

Fund industry insiders also said that long-term closed-end funds are conducive to lock in investors' long-term funds, avoid frequent purchase and redemption and other factors affecting the investment judgment of fund managers, so as to obtain more stable investment income. However, in the environment of open-end funds dominating the market, fund companies need to accumulate certain performance and brand advantages in order to be recognized by investors and successfully issue long-term closed-end funds.

Indeed, for example, the equilibrium value of Ruiyuan, the second public offering product of Ruiyuan fund under Chen Guangming's three-year holding period, reached the upper limit of the initial offering of 6 billion yuan on the day when the mixed fund was raised, triggering a proportional placement, and the final placement ratio may be as low as 15%.

According to the fund issuance announcement, Ruiyuan balanced value three-year holding period hybrid fund is locked up for 3 years for each subscription. Zhao Feng, the proposed fund manager, purchased 30 million yuan by himself, and the fund manager purchased by himself was locked up for 4 years and did not participate in the allotment.

Previously, Chen Guangming had managed Dongfanghong 4, Dongfanghong 5, Dongfanghong 6, Dongfanghong 9, Dongfanghong's leading trend, Dongfanghong's steady growth and other products in Dongfang asset management, with outstanding revenue and risk control. Among them, Dongfanghong No.4, which has the longest management time and the earliest establishment time, has a cumulative return of 457%.

Although the income from buying closed-end products is uncertain, for fund companies and sales channels, closed-end products are conducive to stable income of management fees and commissions.

On March 22, Wang Jianzhong, vice president of China Merchants Bank, a sales channel for head funds, said at the performance report meeting of China Merchants Bank in 2020 that with the adjustment of capital market, the bank's asset allocation strategy from the sales side to customers has been adjusted accordingly. The overall strategy of public funds in the future is to select better fund managers and pay more attention to the sales of closed products.

However, it may not be possible to obtain benefits after the closure matures. For example, Everbright an Rui, which was established last year, holds a year, and Agricultural Bank of China, Huili Ruixiang, holds a mixture for one year, and so on, which are all below the net value.

According to industry insiders, the total cost of custody fee, management fee, transaction fee and other handling fees of most closed-end funds is about 4% per year. If the average annual return of products cannot exceed 4%, it is actually not cost-effective. "To invest in closed-end funds of one to three years, investors need to choose fund managers who have full understanding and trust, and also accept those with insufficient liquidity Restrictions. "