First batch of new-type floating fee funds mark first anniversary, with over 80% of products achieving positive returns.

Background

The funds were introduced as a key innovation within the public fund industry's broader fee reform. Their fundamental structure aims to deeply bind the interests of fund managers with those of investors by linking management fees directly to fund performance, rather than charging a fixed percentage based solely on assets under management.

Key Points

• Strong Overall Performance: Within their first year, over 80% of the 16 funds achieved positive returns. This success rate occurred despite the funds navigating a period of significant market oscillations and structural sector rotations.
• Benchmark Outperformance: A majority (over half) of the funds outperformed their respective performance comparison benchmarks during the same period. This indicates that the active management strategies employed were effective.
• Exceptional Profitability: The report highlights that multiple funds generated returns exceeding 20% since inception. The very top-performing funds created a pronounced money-making effect for their holders.
• Demonstrated Stability: Collectively, the funds showed good overall stability in profitability and risk-resistance capability, suggesting the fee structure may encourage a more disciplined, risk-aware investment approach focused on sustainable gains.

Significance

The successful debut of these products is significant for several reasons. First, it provides a practical, market-tested validation of the performance-linked fee model. The strong results suggest that tying manager pay to results can indeed incentivize better performance that benefits investors. Second, this strengthens the alignment between fund managers and investors, potentially rebuilding trust and demonstrating a tangible shift from a sales-driven to a performance-driven industry model. Finally, the outperformance of many funds versus benchmarks signals that this structural reform can coexist with, and potentially enhance, active investment value. The results set a positive precedent that could accelerate the adoption of similar investor-friendly structures across the industry.