China Fund News reporter Li Shuchao
The fees derived from fund assets are closely related to the interests of each investor and have also received close attention from the market. Recently, a number of exchange-traded index funds have issued announcements to adjust their index licensing fees and appropriately lowered the lower limit of the index usage fees. As of March 10, 46 funds under 17 public offerings have issued such announcements during the year, including many popular technology on-market index funds such as 5G exchange-traded open-end index funds (ETF) and new energy vehicle ETFs.
Industry insiders believe that an appropriate reduction in index usage fees will be generally beneficial to investors and the development of on-site index bases. However, due to the continuous expansion of the domestic ETF market and competition from overseas index compilation companies, there is still room for reductions in domestic index usage fees. .
6 stock ETFs within 4 years
Adjust index usage fees
html On March 10, Yinhua Fund announced that according to China Securities Index Co., Ltd. "Notice on Adjustment of A-Share ETF Fees in the Domestic Market" and the Yinhua CSI 5G Communication Theme ETF , Yinhua CSI R&D Innovation 100 ETF, and Yinhua CSI Innovative Drug Industry ETF’s fund contracts and prospectuses have stipulated that, after consultation between Yinhua Fund and CSI Index Co., Ltd., the company will adjust the aforementioned funds starting from March 12 this year. Index license fee charging scheme.According to the adjustment plan, the index license fee for the above-mentioned funds after the fund contract takes effect will be adjusted from the original lower limit of 50,000 yuan per quarter to the license fee when the quarterly average daily fund net asset value of the fund is greater than 50 million yuan. The lower limit for collecting license fees is RMB 35,000 per quarter. If the billing period is less than one quarter, it will be calculated on a pro-rata basis based on the actual number of days; when the quarterly average daily fund net asset value of the fund is less than or equal to RMB 50 million, there is no lower limit for licensing royalties.
According to statistics from a Securities Times reporter, as of March 10, a total of 46 stock ETF products under 17 fund companies have issued announcements on adjusting index license fees since this year.
Judging from the adjustment plan, the vast majority of funds still maintain the annual index usage fee rate of 0.03%. For on-market index bases with a scale of more than 50 million yuan, most of the lower limits have been lowered from 50,000 to 35,000, and a few have lowered it to 35,000. 10,000, and some fund companies charge the higher of 0.03% annual fee base point and the lower limit is 35,000 yuan/quarter; for products below 50 million, most do not set a lower limit for charging, and a few charge based on the base point fee, which overall shows a downward trend. fee trends.
The so-called index license fee is a fee that a fund company pays regularly with fund assets when using the index to compile the company's relevant underlying index.
Talking about the impact of this fee reduction, the director of the quantitative investment department of a fund company in Beijing said that currently the fund’s index usage fees mainly come from fund assets. If the index usage fees are reduced, it means that the cost of stock ETF products will be reduced, and the overall impact will be on Investors are a good thing. However, in his view, it is still just fine-tuning and not very intensive. If it drops from 3BP to 2BP and the scale of stock ETFs continues to expand, it may not have a great impact on the income of index companies, but the substantial fee reduction will be more significant. big.
According to previous regulations, the underlying index license fee for most stock ETF products is accrued daily and paid quarterly. The lower limit for index licensing fees is 50,000 yuan per quarter (natural quarter). If the underlying index usage fee for the quarter is less than 50,000 yuan, it will also be paid at 50,000 yuan.
There is still room for reduction
At present, domestic stock and bond ETFs implement a differentiated index usage fee structure. Smart Beta ETFs have higher fees. Among stock ETFs invested in overseas markets, ETFs invested in US stock indexes have the highest index usage fees. , the lowest in Japan. According to
data, most bond ETFs currently set an index usage fee of 0.02%, and some Smart Beta Bond ETFs and local government bond ETFs charge an index usage fee of up to 0.04%. Among stock ETFs, the index usage fee for tracking the mainland index is 0.03%, most of the stock ETFs tracking the Hang Seng and H-share index are 0.04%, and the Smart Beta stock ETF charges a maximum fee of 0.1%.
Industry insiders believe that, overall, an appropriate reduction in index usage fees will be beneficial to the expanding stock ETF market.
The Director of the Quantitative Investment Department of the above-mentioned Beijing Fund Company said: "Although the annual index usage fee of 3 BP is not high in terms of fund expenses, it is basically negligible when it is spread equally to each investor, but in the policy direction of fee reduction "
An index fund manager in Beijing also said that in the context of the rapid development of passive funds, all parties are actively creating a better market environment for the development of stock ETFs, including an increase in public offering FOF. Stock ETF allocation, fund companies increasing liquidity market makers, improving fund scale and liquidity, regulators steadily advancing fee reduction measures, etc.
In addition, in addition to encouraging the development of domestic ETFs, the reduction of index usage fees must also take into account competition from international index companies.
The director of the quantitative investment department of the above-mentioned Beijing fund company believes that the index usage fees set by China Securities Index Company have to compete with international institutions. With the internationalization process of the domestic financial market, A-shares are included in international indexes such as MSCI, FTSE, and Russell. Many public funds will also deploy the indices of these overseas index compilation companies, which will bring about a price comparison effect. Domestic index compilation companies will also face competition from international index compilation companies. "The current 3BP index usage fees set by our country are basically in line with international market pricing. However, compared with some mature overseas markets and the growing domestic on-site index fund market, there is still room for further downward adjustments."
currently tracks overseas indexes domestically. Looking at the stock ETFs, most of them implement differentiated fee rates based on fund size, with fee rates ranging from 0.002% to 0.06% depending on the size.
Among them, the usage fee of E Fund Nikko Asset Management Nikkei 225ETF and China Nomura Nikkei 225ETF is only 0.002%, which is currently the lowest in the market; Cathay Nasdaq 100ETF and GF Nasdaq 100ETF, if the fund size Below 100 million, the index usage rate reaches 0.06%, the highest overseas. Looking at the MSCI series of indices, the current index usage rates range from 1 BP to 7.58 BP.
