Equity Market Heats Up; Mutual Funds Cut Fees to Grab Market Share

With the recent significant recovery in the equity market, the public fund industry has seen a wave of promotional activities. Many fund companies have attracted investors through fee reductions and d...

With the recent significant recovery in the equity market, the public fund industry has seen a wave of promotional activities. Many fund companies have attracted investors through fee reductions and discounts. Among them, major ETF players such as Huaxia Fund, Penghua Fund, and Guotai Fund have further reduced the fees of their ETFs to "rock bottom" prices, attracting market attention.

According to public information, on October 9th, Huaxia Fund announced that the management fee and custody fee rates for the ChiNext 100 ETF Huaxia and its linked funds would be significantly reduced. The management fee rate was reduced from 0.50% to 0.15%, and the custody fee rate was reduced from 0.10% to 0.05%, which is already the lowest standard in the industry. Previously, Penghua Fund and Guotai Fund also reduced the fees for their CSI 300 ETF and related linked funds, as well as the CSI 300 Enhanced Strategy ETF.

In addition to ETF products, actively managed equity funds have also joined the fee reduction trend. For example, on October 8th, Nanfang Fund announced that it would reduce the management fee and custody fee rates for the Nanfang Hao Sheng Steady Selection 6-month holding period mixed-type FOF. The annual management fee rate was reduced from 0.8% to 0.4%, and the annual custody fee rate was reduced from 0.15% to 0.05%.

Furthermore, several fund companies have participated in fee discount promotions organized by distributors such as securities firms and banks, further reducing investors' investment costs through discounts. These promotional activities have not only increased the market appeal of public funds but also reflected the fund companies' confidence in the market recovery.

At the same time, the new fund issuance market has also experienced a small upsurge. Wind data shows that in September 2024, 86 new funds were issued with a total share issuance of 87.088 billion, an increase of more than 30 billion shares compared to July and August. Among them, the number and scale of equity funds issued both showed a significant increase. In September, 37 new equity funds were issued with a scale of 25.15 billion yuan, becoming the main force in the new issuance market.

It is worth noting that passive index-type products accounted for the vast majority of the equity funds newly issued in September. Among the 86 new funds issued in September, 33 were passive index-type funds, and 3 were enhanced index-type funds, showing investors' enthusiasm for index investment.

For the future market, fund professionals generally believe that the market trend is expected to continue, and the valuation repair of related varieties is worth looking forward to. However, market volatility may also significantly increase, so the position needs to be both offensive and defensive, balancing performance and valuation.

Manulife Fund stated that with the introduction of subsequent fiscal policies, the market will usher in incremental funds, and risk preference will improve significantly. At the same time, it is also necessary to pay attention to the impact of factors such as the strength of domestic economic fundamentals repair and overseas geopolitical situations on the sustainability of market trends.

Huibai Chuan Fund believes that the policy bottom has been highly clear, economic expectations have turned positive, and the win rate and odds of the equity market have increased. After a short-term general rise, the market may gradually return to a structural market supported by fundamentals, and investors should pay attention to the performance realization ability of the varieties in their positions.

In terms of specific investment opportunities, Manulife Fund is optimistic about the economic cyclical sectors that have undergone significant adjustments in the early stage, while Huibai Chuan Fund mainly looks forward to industries that resonate with domestic counter-cyclical regulation and overseas demand, domestic subsidy policies that stimulate demand for consumer leaders, and quality companies in the banking and real estate chain supported by local government debt and real estate optimization policies.Overall, as the equity market warms up and the public fund industry engages in various promotional activities, investors' enthusiasm for allocating equity assets is gradually increasing. However, against the backdrop of increased market volatility, investors still need to remain cautious, allocate assets reasonably, and achieve stable investment returns.