(Original title: Just now, another one cannot take effect!)
The new fund market continued to slump, and another product was announced as a failure. Chuangjin Hexin Fund announced today that its Chuangjin Hexin Selection and Return Mixed Fund contract could not take effect, becoming the sixth fund that failed to raise funds during the year. These funds have been announced intensively in the past 20 days, and their categories include ETF stock funds, “fixed income +” funds and pure debt funds.
From the perspective of the industry, the cold or even failure of fund issuance is a normal fallback phenomenon after the outbreak of the profit-making effect during the rapid development of the industry, which should be viewed rationally. There is a saying in the fund industry that “it’s hard to do well, and it’s hard to do well”. From the perspective of historical data, the blocked fund issuance does not mean that the allocation value of the fund has also decreased simultaneously. On the contrary, this time is the time for layout.
Another “fixed income +” fund failed to issue
On March 2, Chuangjin Hexin Fund announced that its Chuangjin Hexin Selection and Return Hybrid Securities Investment Fund will start raising on December 13, 2021, and the fundraising period will expire on February 28, 2022, failing to meet the requirements of the fund contract. Therefore, the fund contract cannot take effect.
According to the data, Chuangjin Hexinâs selection return is a partial debt hybrid fund, and the fund custodian is Hua Xia Bank. After the failure of the issuance, the fund has also become the second “fixed income +” product that has been issued this year.
Although “fixed income +” funds are the preferred safe haven for funds in a volatile market, the number of failed fundraising cases for “fixed income +” funds has increased significantly since the last six months. Industry insiders believe that under the background of the surge in the supply side and the increase in performance differentiation, the “fixed income +” strategy products with dual allocation of stocks and bonds are also facing the test of dual fluctuations in stocks and bonds.
In fact, as the focus of many fund companies, “fixed income +” funds are in an embarrassing situation. Since 2022, the stock market has continued to fluctuate, superimposed on the high level of the convertible bond market, and “fixed income +” funds have retreated collectively, and even more than 80% of “fixed income +” funds have had negative returns this year, turning into “fixed income-” .
Wind data shows that as of March 1, more than 100 “fixed income +” funds have fallen by more than 5% this year, and there are even products that have fallen by more than 10%. Originally positioned as an “earthquake-resistant artifact”, the actual pullback is larger than that of some equity funds. It is reasonable that the sales side of “fixed income +” funds will be differentiated.
As of March 2, the number of funds that have failed to raise since the beginning of this year has been expanded to 6, including 2 partial debt hybrid funds, stock ETF funds and medium and long-term pure debt funds.
An industry insider in South China said that according to the regulations, the establishment of a new fund should, within 3 months from the date of the fund share sale, the total fundraising share should not be less than 200 million shares, and the fund raising amount should not be less than 200 million yuan, and The number of valid subscriptions for fund units shall not be less than 200.
“These funds were launched successively in November and December last year, but since the end of last year, the market has continued to fluctuate, the popular track has made a large correction, and the fund’s profit-making effect is poor, which has caused investor sentiment to fall into a trough, and the fund is naturally not easy to sell. With the issuance of the top fundraising period of more than two months or even three months, these funds subscribed for “New Year’s Eve” were eventually not established as scheduled.” The above-mentioned person said.
The average size of funds established in February hit a new low in nearly three-and-a-half years
Judging from the fund establishment data, the new fund is obviously not easy to launch. After the average establishment size of a single fund in January hit a new low since March 2019, the average fundraising size of funds fell again in February.
Wind data shows that in February this year, only 63 funds were established in the whole market, with a total issuance share of 33.767 billion copies, and the average size of a single fund was only 536 million yuan.
In January, when market sentiment was low, 148 newly established funds issued a total of 118.820 billion yuan, and the total amount of funds raised in a single month dropped by 60% month-on-month. In contrast, in February this year, the total amount of funds raised in a single month fell by 70% from the previous month; the establishment of a single fund dropped by 33.3%.
In terms of the average establishment size of a single fund, the average establishment size of a fund in February hit a new low since October 2018, which is less than the 552 million units issued by a single fund in February 2019.
In the past three and a half years, only the six months of January, February, June, August 2019, April 2020, and January 2022 have the average fund establishment size below 1 billion yuan.
Judging from the situation of individual funds, many newly established funds in February barely reached the establishment standard of 200 million yuan. Cathay Ruifeng Pure Debt Bond Fund was established on February 15 with a scale of 203 million yuan and only 202 valid subscribers. The Southern Comparative Advantage Mixed Fund was established on February 7 with a scale of 321 million yuan. Even if fund companies send star fund managers to take command, fund issuance is not very prosperous.
Although the issuance market is not very popular, according to many industry insiders, they should not be pessimistic about the fund issuance market, and should be more confident in the Chinese capital market, calling for a rational view of the low market sentiment.
An industry insider said, “Despite the repeated market fluctuations in the past two years, the fund’s profit-making effect is still significant, and fund managers with outstanding investment management capabilities have created excellent returns for investors. The short-term issuance of funds is a process of rapid development of the industry. It is also a normal phenomenon in the fund’s performance, and it is also a normal fall in the fund’s performance, which needs to be treated rationally and objectively.”
Fund companies “fancy” boost market confidence
Faced with the rising difficulty of issuance, fund managers as professional institutional investors are still full of confidence, conveying confidence through various means, boosting market sentiment, and advocating rational and long-term investment.
Recently, a large number of well-known fund managers, including Cui Chenlong, Tan Li, Yang Yu, Luo Shuai, etc., have taken action to purchase their own fund products, most of which are subscription or co-investment of their new funds. While many fund managers subscribed for their new funds, Liu Jiang and Ge Lan purchased their old funds.
Insiders said that self-purchase reflects the confidence of fund managers in A-shares and fund investment, and short-term market adjustment is a relatively good opportunity to deploy high-quality assets, showing the confidence of public fund managers in the market outlook. On the whole, “self-purchasing” shows the sense of responsibility of professional investors of public funds, and expresses confidence in their own management ability or purchased products.
In the view of some public funds, this wave of market adjustment in A-shares may be difficult to see an âemotional bottomâ immediately in the short term, but fund self-purchase may accelerate the emergence of a sentimental bottom.
Looking back on the trend since 2020, we will find that, taking the CSI 300 Index as an example, the time of bulk self-purchase was a market low that year. However, some market analysts believe that the market will not change the rhythm of the market immediately because of the self-purchase of fund companies. Although self-purchase can improve market confidence, the key to strengthening the market is to adjust and end itself.
In addition to self-purchase, fund companies are also intensively reducing rates, providing investors with discounts in weak markets. Recently, a number of fund companies have released announcements of lowering management rates for their products, and many funds have cut management rates and custody rates by more than half.
In addition, many fund companies have frequently joined the ranks of preferential rates, involving subscription fees, redemption fees, subscription fees and other discounts. Some companies have also recently lowered the minimum single redemption amount limit for their products.
Well-known fund managers have also recently occurred intensively, and this is also considered to be a way to boost investor confidence. Hu Xinwei, manager of Tianfu Value Creation Dingkai Mixed Fund, recently published a letter to investors, encouraging them to “strengthen their confidence and be patient.”
In addition, a group of active equity funds intensively announced the reopening of “open to welcome customers” and resumed the subscription or large-amount subscription business. The choice of many equity funds to open up large-scale subscriptions at this time indicates that the fund managers are still full of confidence in the market outlook.
When the fund is hard to come out or it is a good opportunity to enter the game
From the perspective of historical data, the blocked fund issuance does not mean that the allocation value of the fund has also decreased simultaneously. On the contrary, this is the time for the official layout.
There is a saying in the fund industry that “it’s hard to do good, but it’s hard to do well”, which means that when the fund issuance is hot, it is often the top of the market, and when it is not good, it may be the bottom of the market. After this round of adjustment in the A-share market, the valuation of some companies has entered a relatively reasonable position, and the allocation value has gradually emerged.
The statistics of Yinhua Fund found that, using the common stock fund index as the measurement index, simulated and calculated the income of buying and holding for a certain period of time on the first trading day of the month in which 10 funds were issued in the cold period in history.
The results show that in the cold period of the above-mentioned 10 fund issuance, if you buy the fund and hold it for one year, the probability of obtaining a positive return is 70%. Loss of 12.39%, but if you buy and hold for 1 year in July 2014, the yield is close to 90%.
Data source: Wind, Yinhua Fund as of December 31, 2021
If you buy the fund and hold it for three years, you can achieve positive returns except for buying in January 2016. If you buy and hold until the end of last year, the probability of a positive rate of return is 100%, and the annualized rate of return is above 12%.
If you buy at the hot stage of fund issuance, what about the fund’s return?
In the hot period of 10 fund issuance, if you buy the fund and hold it for 1 year, the probability of getting a positive return is also 70%. However, from the perspective of specific income, if you buy it in January 2018, you will lose 24.33% for one year.
If you buy it in December 2019, the one-year yield will reach 58.14%. This means that when the fund issuance is cold, it is more secure to buy funds, the loss is limited, and the income elasticity is more sufficient.
In addition, judging from the annualized rate of return from the holding date (as of the end of last year), the rate of return in the hot period of fund issuance is generally lower than that in the cold period of fund issuance.
Data source: Wind, Yinhua Fund as of December 31, 2021
Compared with the hot period of fund issuance, when the market is in a downturn, it is often a good opportunity to deploy funds. After the decline, the stock price has a higher margin of safety, and it is easier to obtain long-term excess returns.
Some fund managers bluntly stated that the current time is a good opportunity to attract long-term and rational investors. After the fund broke out of the circle, it has been on the hot search for many times, and specialization is facing rapid inclusiveness. As the market calms down, it is an opportunity for real fund fans to invest in a long-term and rational manner.
In fact, after a sharp correction, the cost-effectiveness of A-share investment has improved significantly, the market value has been greatly underestimated, and some high-quality leading stocks have gradually fallen out of value. Recently, almost all major investment banks in the world have raised their investment recommendations on A-shares to increase their holdings, which may usher in a structural market in an environment with relatively abundant liquidity.