The former "top stream" walked down the altar Where is the road of star fund managers?

Top performance, first-class gold attraction, and everyone's attention, this is the true portrayal of the top fund managers who are all the rage in 2021. However, what people didn't expect was that the star fund, which had unlimited scenery, soon suffered a cold winter, and the next performance could be described as dismal. Two years on, the performance of most top fund managers is still difficult to say.

What is the driving force behind the collapse of performance when the top stream of the past stepped down from the "altar"? The reporter of China Securities News interviewed a number of industry institutions and learned that the drag of scale, the investment style of the top stream pouring into the track, and the short-term, high-frequency structural rotation of the market are all reasons for the poor performance of top fund managers. However, industry insiders believe that the sluggish performance of the top stream will not necessarily become a long-term phenomenon, and at the same time, fund companies are constantly exploring to break the scale curse and provide more team support in fund management. With the beginning of a new round of economic recovery or the emergence of a new wave of industries, top fund managers may be able to gradually emerge from the current net worth dilemma.

Performance "changes face"

Top fund managers have suffered a performance crisis. Opening the representative product of a top fund manager, the green screen makes people sigh that in the month since April 4, the fund's net value has only risen for 21 days, and the net value has fallen for the rest of the trading days. In the past January, the fund's net value rose or fell by about -4.7%, 62.0% in the past year, and -5.33% in the past two years.

In fact, since the first half of 2021, the market has changed abruptly, and many products managed by top fund managers have since gone into a downturn. Two years on, the vast majority of top fund managers are still struggling in the maelstrom.

The reporter's statistics on the performance of equity-biased funds with a size of more than 2021 billion yuan at the end of June 6 (different shares are only counted once) found that as of May 200, 2023, in the past two years, only 5 of the 21 funds had a positive return, and the rest of the funds had a loss of more than 25%. Of these, two funds lost more than 1%, nine lost between 10% and 40%, eight lost between 9% and 30%, and the remaining five lost between 40% and 8%. These products, without exception, are managed by well-known fund managers in the industry.

In the comment area of the fund sales platform, the torture of top fund managers can be seen everywhere: "After more than two years and have not returned the capital, can the star fund manager do it?" ”

In fact, brilliant performance was once the key to the fame of top fund managers. Looking at the long term, the returns of many top fund managers are still bright. For example, in the past five years, the products managed by top fund managers such as Liu Gexiang and Liu Yanchun have yielded more than 60%, and the products managed by Feng Mingyuan, Zhou Weiwen, Lu Bin, Yuan Weide, Qu Yang, Zhao Bei, Guo Xiaowen and others have doubled their returns in the past five years. From the perspective of annualized returns, many top fund managers who have lost significantly in the past two years still have an annualized return of more than 10% in the past five years.

So, does the fall from the high level mean that the top fund managers are no longer working? In the view of Beijing Mingsheng Dongcheng Private Equity Fund Management Center, the difficulties faced by domestic fund managers at this stage are related to the current transition period of the industrial cycle economic environment, and the evaluation cycle should be put in the long term. In the past, the top funds in the past were often at one extreme of the pendulum when they were paid attention to by the majority of investors, and mean reversion is the eternal law of asset price changes.

A Beijing public fund manager also said that in essence, behind the pressure of well-known fund managers, many funds are buying at the top of the stage, resulting in a poor holding experience for investors. In fact, looking at the long term, the performance of star products in the 5-year or 10-year dimension is not bad.

Can the scale spell be broken

Some top fund managers have briefly fallen into a downturn, perhaps due to a problem of ability, but in the past two years, many top fund managers have disappeared, what is the crux behind it? Some people believe that scale may be one of the reasons for this "top turmoil".

According to the fund evaluation center, the management scale of top fund managers is generally very large, and excessive management scale increases the management difficulty of fund managers, and also puts forward higher requirements for fund managers' investment and research capabilities. The so-called "ship is difficult to turn around", the transaction cost of oversized funds is high, and the operational flexibility is limited. In the rapidly changing market environment of investment, it is difficult to adjust positions in a timely manner, which will have a greater impact on the fund's income. In addition, based on the "Double Ten rule" of public funds, the larger the scale means that fund managers have to select more excellent investment targets, which is a great challenge to fund managers' investment and research energy and ability.

Kong Siwei, fund manager of Minsheng Bank of Canada Outstanding Allocation 6-month Hybrid FOF, said that the impact of scale factors on performance exists. On the one hand, due to the market style in the past two years that is biased towards small and mid-cap stocks, it is more difficult for larger funds to form heavy positions in small and mid-cap stocks; On the other hand, it is also due to the high impact cost of large-scale funds when repositioning, which will also have a certain impact on performance.

A public fund manager in Beijing agrees. He introduced that the scale is too large, such as more than 10 billion yuan, the impact cost of buying and selling may be large; Excessive size means that the range of stock selection is greatly reduced, and many small and mid-cap stocks cannot buy enough volumes, which means that fund managers naturally need to give up some investment opportunities.

In addition, the report shows that funds with larger management tend to increase the concentration of holdings, while larger funds have a more pronounced holding style, which may also increase product volatility at specific stages of the market.

However, the scale curse is not an eternal problem. Compared with overseas, the management volume of many overseas leading asset management institutions is much larger than that of China, but the difference is that the performance of overseas large funds is relatively stable. According to the fund evaluation center, investment products and investment tools in overseas markets are more abundant than in China, which provides more possibilities and flexibility for large-scale asset management.

Therefore, in the eyes of the industry, scale does not necessarily become the main reason for the collapse of performance, as a representative product of inclusive finance, public funds should have the ability to manage large-scale funds. With the continuous development of the financial derivatives market and the full implementation of the reform of the stock issuance registration system, the basic assets of the capital market have been continuously expanded, and the quality of the underlying assets has been greatly improved from the perspective of increment and stock, and the underlying assets that can be invested by domestic public funds are gradually enriched, and this dilemma is expected to be alleviated.

In addition, the strong support of investment research platform is conducive to top fund managers to further increase the upper limit of scale management. "Unlike private placement, public fund managers have a well-established team behind them, especially top fund managers, and the company will devote resources to provide more support to fund managers." A public fundraiser said.

Can the glory of the past be restored?

In fact, compared with the scale factor, the extreme market style and environment are the more important driving forces behind the "top turmoil". Respondents generally believe that compared with financial markets such as the United States, the short-term, high-frequency structural rotation market in China is more significant.

"The market environment or style is definitely one of the important reasons." Kong Siwei said that most of the top fund managers are consumer and new energy style fund managers, and the recent performance in these directions is not very good. In addition, both the "Mao Index" and the "Ning Portfolio" are dominated by large-cap stocks, and in recent years, the market style is more inclined to small and mid-cap.

The fund evaluation center pointed out that most of the top fund managers born in the structural bull market in the past few years have obvious labels, such as "medicine", "new energy", "consumption" and "growth". The fund manager achieved excellent investment performance in the market environment at that time and within his comfortable circle of competence. However, the extreme market style in the past two years has had a certain impact on top fund managers.

Liu Yiqian, head of the Shanghai Securities Fund Evaluation Research Center, said that many large-scale funds belong to thematic funds, these funds because of the high concentration of the industry, the style is concentrated, when the prosperity of the sector is high, such funds can earn ultra-high returns, but when the market is in a structural rapid rotation market, the performance of such funds will also pullback.

In the face of the sudden change in market style, where are the top fund managers, and can they reproduce brilliant performance in the future? Are the products managed by top fund managers still worth following by the people?

Kong Siwei said that as an institutional investor, he prefers fund managers to stick to their own track and style, so that they can better track and understand his investment ideas and behaviors. But if you are an individual investor and don't have much time and energy to track and trade funds, it may make sense to choose a relatively balanced and flexible fund manager.

Liu Yiqian said that when the market falls, the fund's income will inevitably fall, so it is not objective to evaluate the quality of fund products based on short-term performance. When choosing funds with a more concentrated style such as industry theme funds, it is necessary to look at it with a balanced perspective, and the evaluation should not be completely abandoned because of short-term performance corrections.

As for the future performance of the products managed by top fund managers, industry insiders believe that it depends on a variety of factors. For example, from the perspective of the marketing strategy of fund companies, if fund managers carefully consider factors such as market heat, investment timing and investment management capabilities when promoting and selling these products, and balance the size of funds, the subsequent performance of these products may improve. From the perspective of fund management, under the premise that the fund manager clearly defines the positioning of these products, the research strength of the team is improved through talent introduction or training. When fund managers improve their investment strategies, they can get strong research support from the team, which can also help these products to achieve better returns.

In addition, with the emergence of a new wave of industry, top fund managers are expected to regain their net worth by seizing new investment opportunities. MSCI Dongcheng believes that the domestic macro economy and industrial structure in the past two years are in a new round of switching process, and the intuitive performance is that many large industrial sectors with outstanding performance in the previous two years, such as new energy, medicine, food and beverage, have entered the growth rate shift period, superimposed on the internal and external disturbances of the macro in the past two years, further amplifying the trend of industrial changes. However, the fact that there is no new alternative industrial sector that can undertake a large enough amount of capital in a short period of time does not mean that there will be no in the future. Considering the new goals and requirements of industrial development of "Chinese-style modernization", with the opening of a new round of economic recovery or the emergence of a new industrial wave, it is believed that many fund managers can rely on their strong research strength to gradually get out of the current predicament.