01

Latest updates on fund managers

1. In the second quarter, Zhu Shaoxing and Fan Kun adjusted their positions in Guangri Shares.

In the latest top 10 list of circulating shareholders announced by Guangri Shares, Zhu Shaoxing's FGTH and Fan Kun's Rongtong Domestic Drive Hybrid appeared for the first time, holding 8.081 million shares and 7.8854 million shares respectively.

2. Increasing trend of fund managers "returning to basics" in recent years.

In recent years, the fund industry has seen a special phenomenon of fund managers "returning to basics", that is, switching careers or serving as fund manager assistants, which is especially obvious this year. According to incomplete statistics, at least 5 fund managers have changed jobs or become assistants in the past two months, and job transfers are more common in small and medium-sized fund companies.

Insiders point out that the fund managers of small and medium-sized fund companies manage smaller scales, face greater performance pressure, and have a more obvious impact on the fund company in the face of performance fluctuations. Therefore, under the background of overall poor performance, the fund managers of small and medium-sized fund companies are more affected.

02

Today's fund news overview.

1. Convertible bond market sees redemption risk again!

On August 6th, Lingnan Convertible Bond and its underlying Lingnan Shares jointly announced that as of July 31, 2024, the remaining amount of Lingnan Convertible Bond was 0.645 billion yuan, and the current monetary funds of the company could not cover the principal and interest of convertible bonds, so there was a significant risk of redemption. Analysts pointed out that compared with the ST convertible bonds that have already defaulted, Lingnan convertible bonds may be the first convertible bonds to default on the main board. In the past, Lingnan convertible bonds were particularly favored by public funds.

8. Analysis suggests that Lingnan convertible bond initial public offering might default. Prior to that public funds had shown deep affection towards Lingnan convertible bonds.

2. Reduction in public offering convertible bond positions.

According to Choice statistics, among 76 convertible bond theme funds (calculated separately by share), only 7 have a positive performance return since the beginning of this year; many convertible bond funds have fallen by more than 10% this year. It is worth noting that although public funds increased their holdings of 4 billion yuan in convertible bonds in the second quarter, the scale of active reduction is large, and the overall position of public funds in convertible bonds is decreasing.

3. The duration of newly approved bond funds should not exceed two years? Some public fund companies have signed commitment letters.

Recently, there have been market rumors that regulatory authorities have required newly approved bond funds to issue commitment letters with a duration of no more than two years, mainly targeting top fund companies. A public fund institution has confirmed this to reporters. "Not only top fund companies, but also many medium-sized fund companies have received such notifications," said an industry insider. A public fund institution in South China revealed to reporters that the company recently submitted a new bond fund and has signed a commitment letter in accordance with regulatory requirements, promising to strengthen control in terms of duration operation.

4. Public fund self-purchase of stock funds exceeded 1.1 billion yuan this year.

Data shows that as of August 6th, public funds had net purchased over 1.165 billion yuan of their own stock funds since the beginning of this year, leading other types of products by a large margin. In addition, FOF followed closely, reaching 0.654 billion yuan; while money market funds and hybrid funds saw net redemptions.

5. The scale of Shenzhen's private equity venture capital fund has reached 1.5 trillion, and the scale of Patient Capital has increased by 30%.

The Shenzhen Private Equity and Venture Capital Fund Industry 2023 Annual Development Report was released by the Shenzhen Private Equity Fund Industry Association. According to the report, as of the end of 2023, Shenzhen had a total of 1,766 private equity and venture capital fund managers, 7,731 outstanding private equity and venture capital funds in existence, and a total scale of 1.5 trillion yuan. Among them, the scale of overseas private equity fund managers' managed funds has increased by 43.8% year-on-year, achieving rapid growth in the scale of overseas funds.

At the same time, the industry is shifting from "expanding scale" to "optimizing structure", gradually forming a benign ecosystem of "survival of the fittest, orderly entry and exit". The custodial ratio of Shenzhen's private equity and venture capital fund products has been increasing year by year, and the abnormal operation has improved, and the phenomenon of cross-regional operations has continued to improve, which is constantly improving the standardization and professional level of the industry.

In terms of building a fund circulation ecosystem, "Patient Capital" has significantly increased its share. The report shows that among the fund-raising sources of Shenzhen private equity and venture capital funds, the scale of medium and long-term funds increased significantly in 2023. The contribution reached 239.21 billion yuan, a year-on-year increase of 31.3%.

6. Hedge funds withdraw from some yen bullish positions, but remain highly concerned about exchange rate volatility risks.

Hedge funds appear to have retreated from unprecedented bullish bets on the yen, but remain concerned about the high price of hedging current positions, indicating increased uncertainty over the next steps for the yen.

Ruchir Sharma, global head of forex options trading at Nomura International in London, said that the dovish comments made by Masayoshi Amamiya, Deputy Governor of the Bank of Japan, on Wednesday reduced the relative cost of hedging the yen's gains over the next month by about a third. But it is worth noting that the hedging cost, which is close to the forward market level, remains high even if the yen itself falls.

The Japanese yen fluctuated within a wide range this week, initially surging due to leveraged funds continuing to exit short positions after the Bank of Japan's rate hike last month, and then quickly falling back after the speech by Masayoshi Amamiya. An index that measures the expected trend of the dollar against the yen over the next month remains near its highest level since January 2023.

03

Today's ETF market review.

The three major A-share indices continued to adjust today. As of the close, the Shanghai Composite Index closed at 2,869 points, the Shenzhen Component Index fell 0.04%, and the Chinext Price Index fell 0.54%, falling below 1,600 during the day to set a new low. More than 2,700 stocks fell, more than 2,300 rose, and the total turnover was 619.9 billion yuan.

On the market, the impact of the suspension of product delivery due to a fire at one of BASF's factories, a German chemical giant, caused the vitamin sector to erupt, with multiple stocks such as Northeast Pharmaceutical and Hunan Er-Kang Pharmaceutical all hitting the daily limit. Five departments implemented a special action to financially guarantee food security, leading to strength in the grain concept, agriculture seed, and other sectors, with Shen Nong Seed Industry rising by 20%. The ST sector rose, with more than 20 stocks such as ST Baili hitting the daily limit. Pre-cooked food, chemical pharmaceuticals, and food and beverage sectors led the gains.

The education sector suffered a heavy setback, with Zhonggong Education and Shanghai Xinnanyang Only Education & Technology both hitting the daily limit; the aerospace and commercial aerospace sectors weakened, with Jiangxi Hongdu Aviation Industry hitting the daily limit; the Beidou Navigation sector weakened, with Shanghai Hugong Electric Group hitting the daily limit; 6G concept, big aircraft, and military industry sectors led the declines.

In terms of ETFs, the transgenic sector rose in the afternoon, with Penghua Fund Grain ETF up 2.13%. The baijiu sector continued to be active, with China Merchants Fund Food and Beverage ETF and Harvest Fund Food ETF up 2.03% and 1.96%, respectively. The construction materials sector rose across the board, with Fortune SG Fund Construction Materials ETF up 1.77%.

The education sector led the decline, with the Education ETF falling 4.28% and the latest premium-discount ratio at -3.04%. The commercial aerospace sector also suffered a large-scale correction, with Fullgoal CSI Military Top ETF, Penghua CSI Defense ETF, and SSE High-end Equipment Manufacturing 60 ETF all falling by more than 3%. Overnight, the SPDR S&P Biotech ETF fell 2.64%.

04

The latest updates on fund products.