Original New Economy IP New Economy e-line 2022-06-13 09:31 published in Guangdong
included in the collection # Public Fund 3
is related to 25 trillion public funds.
On the evening of June 10, China Securities Investment Fund Association ( China Securities Association ) officially released the "Guidelines for Performance Appraisal and Salary Management of Fund Management Companies" (hereinafter referred to as the "Guidelines") on its official website. The China Fund Association stated that the "Guidelines" aim to standardize the performance appraisal and salary management behavior of fund management companies, improve the long-term incentive and constraint mechanism of the public fund industry, and promote the stable operation and sustainable development of fund management companies.
New Economy e-line noticed that the top-level architecture design of the public offering industry has become increasingly perfect this year. On April 26 this year, the China Securities Regulatory Commission issued the "Opinions on Accelerating the High-Quality Development of the Public Fund Industry" (hereinafter referred to as the "Opinions on High-Quality Development"). This document is a top-level design document for the public fund industry, which clarifies the development direction of the public fund industry. Subsequently, the China Securities Regulatory Commission also issued the "Regulations on Supervision and Administration of Publicly Offered Securities Investment Fund Managers" (hereinafter referred to as the "Regulations on Management") and its supporting rules on May 20 this year.
Among them, the core content of the "Manager Measures" is in line with the "Opinions on High-Quality Development" and is an embodiment of the further implementation of the "Opinions on High-Quality Development" at the system and implementation levels. The "Guidelines" are the first implementation details for the public offering industry after the release of the "Manager Measures".
statistics show that the scale of public funds exceeded 25 trillion yuan at the end of 2021, accounting for 41% of the asset management business under the supervision of the China Securities Regulatory Commission, setting a new high. If the special account and subsidiary business of public funds are included, the scale exceeds 32 trillion yuan, and it has become the asset management business with the highest proportion in the asset management industry in the entire market. It can be said that the above series of regulatory measures are of milestone significance in the asset management industry.
It is reported that the "Guidelines" will come into effect on the date of publication. Fund management companies shall adjust and improve the existing performance appraisal and salary management work before December 20, 2022 in accordance with the requirements of these guidelines.
Improve the long-term incentive and constraint mechanism
According to the new economy e-line understanding, in order to improve the long-term incentive and constraint mechanism of the public offering industry, the "Guidelines" clearly state that fund managers should establish and improve a long-term assessment mechanism covering core employees such as business management and fund managers, and require fund managers to strictly implement the salary deferral system, establish and improve the bonus follow-up mechanism for core employees such as business management and fund managers, implement a bonus retrieval and deduction system for violating the regulations, and strictly prohibit short-term incentives and excessive incentives. In summary, the "Guidelines" regulates the three major systems, including the salary deferral system, the bonus follow-up system and the recourse deduction system.
Source: China Fund Association official website
Among them, in terms of salary payment, fund management companies should establish and implement a performance salary deferred payment system, clarify the scope, term and proportion of applicable personnel, etc. The deferred payment period and deferred payment amount of performance compensation shall be consistent with the long-term interests and business risks of fund share holders. The deferred payment period shall be no less than 3 years, and the deferred payment speed shall not be faster than equal proportions.
Performance salary deferred payment system applies to the scope of personnel including but not limited to the chairman, senior management, heads of major business departments, heads of branches and core business personnel. Among them, the amount of deferred payments for senior management personnel, fund managers and other key positions shall not be less than 40% in principle.
In addition, in the bonus follow-up system, senior management personnel, heads of major business departments, and fund managers of fund management companies shall purchase a certain proportion of performance compensation for the company or the public fund managed by themselves, and must comply with the maturity limit of fund practitioners investment fund .
Specifically, senior management personnel and the heads of major business departments shall purchase the public funds managed by the company with no less than 20% of the performance compensation of the year, of which the purchase of equity funds shall not be less than 50%, except in the case where the company has no equity funds; the fund manager shall purchase the public funds managed by the company with no less than 30% of the performance compensation of the year, and shall give priority to the public funds managed by the person, except for reasons such as the funds managed by the person being in a closed period. If the fund manager is also a senior management and the head of the main business department, he shall also meet the above requirements.
At the same time, in terms of the recourse and deduction system, the fund management company shall establish a strict accountability mechanism enhance the binding force of salary management, including but not limited to stop paying, recourse and deduction, etc., to clarify that relevant personnel fail to perform their duties diligently and are responsible for illegal and irregular behaviors or operating risks of the company, the company shall pursue internal economic responsibility in accordance with the relevant provisions of the system, and may stop paying the unpaid part of the salary of the responsible personnel, and require them to return the relevant bonuses for the year incurred in the relevant acts, or stop implementing long-term incentives for them. The accountability mechanism should also apply to resigning personnel.
The Guidelines also stated that the board of directors' assessment of the management and the company's assessment of key positions such as investment research and sales should be combined with long-term investment performance, investors' long-term investment income, compliance and risk management, professional ethics level, and scale ranking, management fee income, short-term performance, etc. shall not be used as the main basis for salary assessment.
In fact, before this, most fund companies often mainly evaluated the scale of the year and the performance of the year. After supervision and supervision urged the establishment of a long-term assessment mechanism, some funds may change the phenomenon of pursuing short-term performance, scale ranking, and chasing hot spots to release products, which will help promote the formation of long-term investment concepts in the market.
Fund investors make money in performance appraisal
Not only that, in addition to long-term investment performance, in response to the market criticized the phenomenon of "funds make money, investors do not make money", the "Guidelines" emphasizes the need to include investors' actual profits in performance appraisal. Specific performance evaluation indicators should include economic benefit indicators , compliance risk control indicators and social responsibility indicators. Among them, economic efficiency indicators should reflect the long-term assessment of more than 3 years, the actual profit situation of investors, and the construction of professional capacity such as investment research.
The so-called long-term investment performance refers to the investment income in the past 3 years or more. Fund management companies should comprehensively consider risk and return based on investment goals, investment scope, investment strategies, etc., and combined with performance benchmarks. Relevant assessments should avoid the use of single indicators and should weaken the relative ranking. If the fund manager has been managing a fund for less than 3 years, the impact of the fund's investment performance in the assessment can be weakened by appropriately reducing the weight of relevant performance.
New Economy e-line noticed that after the "Guidelines" included fund investors' money making in performance appraisal for the first time, the shock waves faced by fund companies are inevitable. But in the long run, this move will help change the ecology of the public offering industry and enhance the sense of gain of investors.
As of the end of the first quarter of 2021, the distribution of customers in different income ranges
In addition, according to the "Public Equity Fund Investor Profit Insight Report" jointly researched and produced by three fund management companies, Invesco Great Wall Fund , Fuguo Fund , and Bank of Communications Schroder, and jointly produced by China Securities Journal, the cumulative increase in the performance index of active stock direction funds reached 1,100.79% respectively in the past fifteen years. 910.68%, the annualized yield was 18.02% and 16.67%, respectively. According to the time node, the average yield of all individual customers in history was only 15.44% and 8.85%, respectively. The returns of investors were lower than those of the funds.
Among them, more than 60% of customers' profits and losses are concentrated between ±10%, and only about 10% of customers have obtained more than 30%, and only 2.32% of customers can obtain more than doubled returns. At the same time, customers who lost more than 30% of the losses also accounted for only 1.01%.In other words, the proportion of large profits and losses obtained by purchasing funds is not high, and the phenomenon of funds making money and investors "not making much money" is more obvious.
New Economy e-line learned that after including professional capacity building such as investment research into performance appraisal, fund companies' past development model of over-reliance on "star fund managers" will also face revision. It can be foreseen that the personal IP of celebrity fund managers will be weakened in the future, and they pay more attention to the platform construction of fund companies. Referring to the development experience of overseas fund company Capital Group, the company implemented a diversified investor management team earlier to strengthen ownership, downplay the personal influence of fund managers, and avoid the impact of celebrity fund managers' resignation on fund portfolios and investors.
From an investment perspective, most fund managers’ methodology in the early stage was to select stocks “bottom-up”. Some companies invest less in macro, strategy, industry comparison and other research, and there are even fewer fund managers based on meso-minded thinking or macro-minded thinking. Under regulatory guidance, this part of the research will be strengthened in the future. On the one hand, it can enrich the investment strategy or investment style of fund managers. On the other hand, it can be assisted by other macro or meso-dimensional dimensions to improve the return-risk ratio of the portfolio in terms of the original methodology of the "bottom-up" stock selection concept.
In addition, in terms of fund product innovation, the "pseudo-innovation" that takes advantage of hot spots, grabs gimmicks, and earns scale will be abandoned, and innovative products advocated by regulatory advocacy such as ETF, financial derivative investment, personal retail bond funds, FOF/MOM products, medium and low volatility products, floating net value currency, ETF collective subscription business, public offering REITs, pension investment products, and reasonable concession products of managers are expected to become the mainstream of the market.
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