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Shanghai Times Reporter Ning Peng
Wind data shows that in the first ten months of this year, the non-cash scale of two leading fund companies doubled, namely China Universal Fund and Guangfa Fund. This is the big time the public equity industry has doubled the size of fund companies in one year since 2007.
2020 is also the year with the largest issuance of new funds. In terms of the industry’s growth rate, it is only surpassed by 2007, but compared to 2007, this year it has outperformed the index by a wide margin. Li Xunlei, chief economist at Zhongtai Securities, believes that the “balance” of the times is tilting toward institutional investors.
The pattern of “strong south and weak north” emerges
Since the beginning of the year, the total scale of public offering funds has grown rapidly, surpassing the 16 trillion, 17 trillion and 18 trillion mark in succession. According to industry experts, the year-end data may be even more shocking.
The current public offering scale data is based on late-October data released by the China Foundation Association, but the fund market has not yet cooled down.
In November, 328.3 billion new fund shares were added to the market and hot funds were issued intensively. Among the newly issued funds, there were 27 stocks with more than 5 billion shares.
In the last five working days of December, there was a “feat” of China Dingqing Bond Fund’s first offering of 10.64 billion yuan, which also means that the number of tens of billions of explosive funds born during the year exceeded the 40s, setting a new all-time record.
According to the statistics of Guohai Securities, the issuance of partial capital funds this year has reached 1,828,114 million yuan, far exceeding the 492,000 million yuan of the whole of last year, and the net increase during the year reached 1,336 .079 million shares.
The scale of the industry has expanded and fund companies have also shown a situation where the strong are always strong.
The scale of leading companies such as E Fund, China Huitianfu and GF after excluding money funds has increased by more than 75% compared to 2019, or even doubled. And unlike “Rain and Dew” in 2007, this round of fund-scale outbreak, many small and medium-sized companies feel that “ice and fire are two times.” According to statistics from Ping An Securities, at the end of October, the top 20 fund companies accounted for 60.81% of the scale, averaging 297.209 million yuan, while the average scale of the following 10 fund companies it was only 194 million yuan.
Market funds continue to focus on leading companies, star funds and star fund managers. Wind data shows that at the end of the third quarter, there were 32 fund managers with more than 30 billion active equity funds under management. The major fund companies all have more than 10 tens of billions of funds, of which there are up to 23 tens of billions of funds in E Fund, 19 in China Huitianfu and 18 in China Asset Management.
Fund companies in the north are relatively “lonely” in this round of expansion. Only China, Harvest, ICBC Credit Suisse and Yinhua still rank in the top 20 non-cash scales, with the rest being fund companies in the south. Judging by current data, Beijing fund companies have already pulled out of the top three non-monetary scales, and the initial glory of the “two heroes” vying for industry leaders is gone.
“Beijing fund companies have the strongest shareholder track record, but the degree of commercialization is relatively low. In this closing round, the pace is slower than that of fund companies in the south.” On December 4, a person from the marketing department of a Beijing fund company told Times Weekly Reporter.
Equity products become the biggest promoter
After the money fund scale peaked in 2018, stock funds have become the most important driving force for the growth of the public stock industry. The latest data from the China Foundations Association shows that at the end of October this year, the net asset value of public funds managed by institutions amounted to 18.31 trillion yuan, crossing the 18 trillion yuan mark for the first time. time.
Compared with the end of 2019, the scale of public funds in the first October of this year increased by more than 3.5 trillion yuan, an increase of nearly 24%. Among them, hybrid funds increased by nearly two trillion yuan and equity funds increased by more than 500 billion yuan, a total increase of 69%. A few days ago, many fund people interviewed told the Times Weekly that this round of equity fund expansion exceeded expectations.
“It was a bit unexpected. Our performance this year was relatively good. However, in the first half of the year, we didn’t move our troops until the second half of the year. We didn’t issue some hot funds until the second half of the year.” The market is strong. “Last week, a person from a fund company in Shanghai that offers equity investments said.
A person from a leading fund company in southern China also admitted to a Times Weekly reporter: “It must be admitted that the market was judged cautiously earlier this year and some growth opportunities were missed. Under the complex social environment. like the new corona pneumonia epidemic this year, the market is really unpredictable. “
There is no question that equity funds are the biggest driver of this bull market for funds. In this regard, Li Xunlei noted that the impressive performance of part-capital funds this year, coupled with the decline in the performance of bank-guaranteed wealth management products, has led to changes in the financial needs of residents, thus providing institutional investors with development opportunities.
In fact, private equity funds will also see historic growth in 2020. According to statistics from China Development Bank Securities, on October 1 of this year, the scale of managed private equity investment funds increased by 1.23 trillion yuan over last year, surpassing 3 trillion yuan for the first time in history, of which monthly growth in October exceeded 500 billion yuan.
Or to promote a new wave of “public to private”
Public funds are the largest incremental funds on the A-share market in 2020. Since the beginning of this year, capital from ordinary investors has accelerated in the market. Statistics show that in the first three quarters, the cumulative number of residents who entered the market through bank securities transfers and investment of borrowed funds was 1.5 trillion yuan, accounting for 62% of funds of all investors who entered the market, much more than 41% in 2019.
Regarding the magnitude of the issuance of new funds, the two main “peaks” of 2015 and 2019 have been exceeded in the first three quarters of this year. However, in terms of scale growth, 2007 remained the fastest growing year in the history of the funds. At that time, the scale of Bosera’s fund reached 226.1 billion yuan, ranking first in the industry, an increase of 494.34%.
However, after years of expansion, the size of the fund companies has also increased significantly compared to 2007.
Wind data shows that at the end of November, there were 34 fund companies with a public offering of more than 100 billion yuan in non-cash funds, of which 18 non-cash funds exceeded 200 billion yuan.
Haitong Securities analyst Xun Yugen pointed out a few days ago that in the past, residents used to trade stocks on their own, but this year residents switched to buying funds for indirect investments. In the first three quarters of this year, the share of residents who bought funds on the market accounted for around 80%, and historically, even during the bull market period from late 2012 to mid-2015, this share was less than 20 %.
“Such an outbreak will not be the norm in the industry. This year we have taken a wrong step and we will have to wait many years in the future.” On December 4, a source from a major fund company told Times Weekly reporters. He believes that from a resident asset allocation perspective, there is still plenty of room for development in the public offering industry, but it’s rare to have the right time, the right place, and the mix of people like this year.
So far this year, the median return for part-capital funds reached 36.8%, the highest since 2010. In 2019, the median for part-capital funds also reached 35%.
Historically, it is rare for public funds to have an average return of more than 30% for two consecutive years. The last time was in 2006-2007, but it still underperformed the index. Li Xunlei believes that this time the trend of the A-share market is not strong, and this analysis shows that the balance of the times is tilted towards institutional investors.
From another perspective, many leading companies that meet institutional set-up requirements have also experienced rapid growth in recent years. With good performance, there is a good share price. Since 2016, a total of 96 shares with a 10-fold increase have been born in the A-share market. Until now, the market value of these 10-fold shares held by public funds is nearly 300 billion yuan, which represents public funds. The proportion of the total market value of heavy stocks exceeds 18%.
“For fund managers, it is generally difficult to achieve excellent short-term and long-term performance. Current industry-wide earnings data is also rare in history.” On December 4, a Shanghai-based fund manager told the Times Weekly. He said that this background may lead to another boom in “public-private transfer.” According to data from Wind, at the end of November, the number of public fund managers who left during the year reached a record in almost five years.
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