The Pattern And Trend Of Public Pension Target Fund In Fof Product Evaluation

Qian Yiyun, researcher of Capital Research Institute in the 21st century

The 21st century capital research institute specially launched a series of reports on the research of public pension funds to evaluate key products and analyze market trends.

This is the first issue of a series of reports focusing on the trend and characteristics of related industries, performance and management capabilities of relevant institutions in the context of the third anniversary of the development of pension target funds.

In the past three years, what kind of product matrix has 129 pension target funds formed and what kind of answers have they handed over?

On September 13, the establishment of China's pension target fund has just completed its third anniversary.

A representative event is that on September 13, 2018, the China pension target date of 2040 three-year holding period hybrid fund (fof) (006289) was officially established.

In the past three years, the pension target fund has developed steadily. At present, 129 funds (share consolidated Statistics) have been established, with a total scale of more than 80 billion yuan.

At present, there are 11 funds being raised.

Almost all pension target funds have achieved positive returns since their establishment.

As of September 13, the average net value growth rate of pension target funds has been 25.80%, and the highest net value growth rate has been 81.62%. There are 19 pension target funds whose net value growth rate has exceeded 50% (share consolidation Statistics).

Products: the target date is 2040, and the target risk is stable for one year

As an important supplement to the third pillar of China's pension, the pension target fund has set up a mixed fof and regular open operation mode according to the product characteristics.

Each fund has stipulated the closed operation period and the minimum holding period of investors (1, 3, 5 years). In principle, the proportion of funds with each term investing in stocks, equity funds, hybrid funds and commodity funds (including commodity futures funds and gold ETFs) shall not exceed 30%, 60% and 80% in principle.

In terms of types, pension target funds can be divided into target date funds marked by "20XX year" and target risk funds marked by "positive, balanced and stable".

The former is designed for the five-year population before and after the target retirement date. For example, the "target date 2050 fund" is designed for the retirees from 2048 to 2052. It assumes that the risk tolerance of investors decreases gradually with age, so the allocation ratio of high-risk assets will be gradually reduced.

The latter is determined by the allocation proportion of high and low risk assets and its risk characteristics, and maintains the investment proportion for a long time. Generally speaking, the proportion of high-risk assets invested by active target pension funds is 65% ~ 80%, that of balanced pension funds is 45% ~ 60%, and that of robust pension funds is 10% ~ 25%.

According to the research data of the 21st Century Capital Research Institute, as of September 13, the market has established 61 pension target date funds and 68 pension target risk funds (share consolidation Statistics).

Among them, the three-year holding period funds account for half of the total.

From the perspective of the shortest holding period of investors, the target risk fund is shorter than the target date fund.

The latter is dominated by three-year and five-year periods. The proportion of high-risk assets in the early stage is higher, and the risk is gradually reduced in the later stage; The former is mainly one-year and three-year, and always keeps a fixed risk level.

Only looking at the target date fund, the product design basically takes 5 years as a gradient, among which the fund with target date in 2040 and 2035 is the most.

If the retirement rate is 60 for men and 55 for women, the products are mainly designed for male investors aged 39-48 and female investors aged 34-43.

Among all the funds, the latest target date is 2025, and the products include China Europe foresight pension held in 2025 (008639) and Ping An pension held in 2025 (010643); The farthest one is 2055. The products include ICBC pension held in 2055 (009340) and Huaxia pension in 2055 (011745). In addition to the conventional 5-year gradient, e fund also launched the 2033, 2038 and 2043 target date funds separately.

In the aspect of target risk fund, the stable fund which is more in line with the low-risk demand of pension is in the first place.

Most of them are one-year holding funds with lower ratios of high-risk assets. In addition, the minimum holding period of balanced and balanced funds is three years, and that of active funds is five years.

At present, there are 2 target risk funds in conservative year and stable year, and 4 target date funds in 2035, 2040, 2045 and 2050.

Talking about the product system, Sun Bin, head of fof Yan selection group of Huaxia Fund, deputy general manager of Huaxia Fund, administrative director of institutional equity investment department and asset allocation department, and director of Mixed Assets Investment Committee, said that Huaxia pension target fund includes stable allocation strategy products and aggressive allocation products.

The most important feature of the robust allocation strategy products that control the maximum withdrawal at any point is that each investor can reach the same risk level as far as possible when applying for purchase. Therefore, in terms of strategic asset allocation, it will maintain a relatively constant ratio of stock to debt and strategic asset allocation.

Aggressive configuration products hope to pursue medium and long-term income elasticity in the whole product operation period, adjust the structure of strategic asset allocation and tactical asset allocation based on the life curve of investors, so as to obtain the most stable return for investors after retirement.

Performance: the rate of return has outperformed the hybrid fof this year

According to a and C share statistics, as of September 13, there were 227 hybrid fofs in the market, including 145 pension target funds.

In the structural market, the average return rate of pension target fund is 4.63% this year, which is better than 4.61% of all mixed fof (including pension target Fund); The average return rate of 36.50% in recent two years is also slightly higher than that of 36.38% of mixed fof.

The return rate of the target date fund is generally higher than that of the target risk fund.

Among the top ten returns, only the five-year (009161) of Morgan Jincheng's active growth pension goal, one-year (009460) of Anxin Xiyue's stable pension goal, and three-year (008361) of Cathay Minze's balanced pension goal have entered the top ten in the rate of return since this year. The rest of the funds on the list are all target date funds.

Among them, Jiashi pension in 2050 (007188), Jiashi pension in 2040 (006307) and China Europe foresight pension in 2050 a (007241) appeared in the top ten of the three stages at the same time, while Huaxia, huitianfu and other funds were on the list of nearly one year and two years at the same time.

At the same time, the pension target fund is more stable than other hybrid fof funds.

The semi annual report data show that the average standard deviation of the pension target fund in the past six months, nearly one year and since its establishment is 0.67, 0.68 and 0.58, which are lower than 0.69, 0.73 and 0.61 of the mixed fof. However, the low risk is mainly contributed by the target risk fund, and the average standard deviation of the target date fund is higher than that of the fof fund.

The one-year (009460) stable pension goal of Anxin Xiyue, established in June last year, has achieved a return rate of 10.86%, and the standard deviation is also controlled near the average value of the target risk fund.

Zhan GuanLiang, general manager of the fof Investment Department of Anxin fund and the fund manager of the fund, said: "Our positioning of products may be slightly different from that of peers. Many peer products attach great importance to the control of net worth fluctuation and the control of withdrawal, which is a positive side. The disadvantage is that under such circumstances, it is easy to have insufficient subjective enthusiasm for investment opportunities. We understand that the target risk pension fof is not to completely avoid risks, but to bear in advance On the basis of the agreed target risk, we should pursue the reasonable risk return of long-term investment. Under the set target risk, we should establish the equity asset position, grasp the structural market characteristics of the market, and construct the portfolio. In comparison, our investment will be more aggressive, and in the long run, it is also expected to achieve better returns for investors. "

Investment: the certainty of obtaining excess return

Among the 109 pension target funds (share consolidation Statistics) disclosed in the semi annual report, at the end of the second quarter, the average proportion of fund investment in the net asset value of the fund was as high as 87.26%.

In the face of more than 8000 funds in the market, which are twice as many as a shares, how do fund managers "choose one in a million"?

The Economic Capital Institute of the 21st century has counted the top ten heavy position funds in the semi annual report of pension target funds.

Among the top ten heavy positions funds, there are 545 funds, among which, there are 6 funds with more than 10 times, 41 funds with more than 5 times, and 238 funds with more than 2 times. It can be seen that the choices of fund managers are relatively concentrated.

The most popular type of funds is the flexible allocation of hybrid funds, in a total of 1090 frequency positions 238 times, more than 1 / 5. In terms of bond funds, the frequency of medium and long-term pure bond funds is the highest, with a total of 194 times, 102 times of mixed bond type secondary funds and 50 times of mixed bond type primary funds.

The third highest frequency was partial stock mixed fund, which appeared 141 times, common stock fund 109 times and partial debt mixed fund 62 times. Robust money market funds are not in the minds of fund managers, only 27 times.

Among the top ten funds favored by fund managers, the stock fund ICBC sports industry stock a (001714) received the investment of the top 10 pension target funds, including a (006622) in 2035 and 007059 (007059) in 2040.

At the end of the second quarter, there were not only Ningde era, the leading stock of "Ning portfolio", but also four "Mao index" stocks including Hikvision, Yaoming Kant, Yili shares and Wuliangye.

"The purpose of fof product design is not to obtain the highest return, but to improve the certainty of obtaining excess return through decentralized investment and specialized asset allocation." talking about the investment strategy of fof fund, Zheng Zheng, fund manager of asset allocation Department of Huaxia Fund, said.

"There is a big difference between fof and stock fund and bond fund, that is, fof enjoys a redundant liquidity, which may be much easier than the latter two. When switching fof, it is a day's work to do the conversion of fund shares. The conversion of stock portfolio is not so easy, and the conversion of Bond style is even more difficult, so it is more difficult for individual investors And fof is really a product that can provide them with an effective increase in revenue certainty, "Zheng said.

He said that judging from this year's market situation, it is basically a month after the Spring Festival as the dividing node, which contains a big style switch. Before the Spring Festival, the sectors dominated by traditional blue chip consumption rose. After the Spring Festival, the whole market sentiment quickly turned to the booming new energy and cycle sectors.

Fof fund managers should always make choices according to the market style, help investors grasp the structural opportunities and strive to obtain the best returns in various market environments.

Sun Bin said that fof investment has two very important links, one is asset allocation, the other is fund selection.

In terms of asset allocation, fof fund managers should understand both macro and meso level. In terms of fund selection, Huaxia Fund adheres to six major concepts: first, the fund manager assessment mechanism; second, the support of investment research platform; third, the change of investment manager's ability; fourth, encouraging researchers and fund managers to explore the "dark horse" of the market; fifth, paying attention to the change of strategy; sixth, paying attention to the investment framework at the fund level, And the consistency between the underlying fund investment framework.

On how to tap the "dark horse", Lu Shaoqiang of the fof fund's strict selection group said: "First of all, we hope to cover the whole market fund. Many of the well-known star fund managers in the market are former employees of Huaxia Fund, and their peers will also give us some internal recommendations. Finally, through some rock turning research, we will constantly find out whether there are good products under the stone, and through hard work and hard work, we can look for" black horse "from the bottom up."