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Card Index Investment Segmentation Fund Strengthens Smart Beta Product Layout

January 11, 2019 02:14
Author: Huang Shu-hui
source: China Securities Journal
edit:Eastern Fortune Network

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[Cartoon Index Investment Segment Funds Strengthen Smart Beta Product Layout] Under the background of the large expansion of ETF scale and the gradual maturity of indexed investment, many fund companies have begun to try at the same time as they develop broad-based and industry-based index products. Smart Beta (smart beta) has made a breakthrough in the field of its future development as an index product. Recently, the enthusiasm of major fund companies to deploy Smart Beta products has increased significantly. (China Securities Journal)

InETFUnder the background of large-scale expansion and indexed investment, there are manyfund companyWhile developing broad-based, industry-based index products, it has also begun to make breakthroughs in the field of Smart Beta (Smart Beta) as one of the future development directions of its index products. Recently, majorfundThe enthusiasm of the company's layout of Smart Beta products has improved significantly

Smart Beta product intensive release

Smart Beta is a non-market-weighted index investment that increases the exposure of the index to certain factors such as dividends, value, quality, low volatility, etc., through certain rules or algorithms, in order to obtain corresponding excess returns. Compared with traditional passive investment products, Smart Beta products have the characteristics of low cost, large capacity, high transparency and stable style of passive funds, and at the same time can capture excess returns, which has attracted more and more attention from investors. In recent years, the usage rate of overseas Smart Beta financial institutions has continued to rise, and the market scale has continued to expand.

The first Smart Beta ETF in the domestic market isHuatai Bairui FundThe SSE Dividend ETF issued in 2006, the development of such products has been tepid for many years. However, since 2018, the scale of ETFs has grown against the trend, and FOF products have been released, which has driven the fund companies' enthusiasm for the layout of Smart Beta products. The fund companies that declare and issue Smart Beta ETFs have begun to increase.

Statistics show that a total of 38 ETFs were established in 2018, among which a number of Smart Beta products emerged, such as Huan CSI 500 industry neutral low-volatility ETF, Huatai Bairui CSI dividend low-volatility ETF, Fuguo CSI ETF, Ping An Zhongde - Medium and high-grade corporate bond spread factor ETF, etc. Other passiveIndex fundIt also includes a number of Smart Beta products, such as Chuangjinxin CSI Dividend Low Volatility Index Fund, Hang Seng QianhaiHong Kong Stock ConnectHigh dividends and low volatility index funds.

At the same time, at the beginning of the new year in 2019, the funds that are being issued and waiting for release also include many Smart Beta products, such as Huaan.Shanghai and Shenzhen 300Industry Neutral Low Volatility ETF, CICC MSCI China A Share International Dividend Index Fund, Puyin Ansheng CSI High Dividend ETF, Warburg S&P China A Share Quality Value Index (LOF), Xingye SSE Dividends Low Volatility ETF, etc. In addition, according to the SFC website fundraising application publicity form, there are still many Smart Beta products in the process of waiting for approval.

  Everbright Securitiesresearch reportAnalysis, the recent launch of Smart Beta products mostly focus on low volatility factor and bonus factor products, some products combine two factors. From the perspective of 2018, the dividend index performed well, which was less in the main broad-based index. The 300-500 industry neutral low-wave index with more new products tracked in 2018 also has a relative market-weighted index throughout the year. There must be excess returns. Both low volatility and dividend factors have long-term logic and effectiveness, and have good stability, which is suitable for launch as a single factor product.

Still in the layout incubation period

Due to the performance of the Smart Beta strategy in recent years, global financial institutions are more accepting of the Smart Beta strategy. According to FTSE Russell's "Smart Beta: 2018 Global Asset Manager Survey" based on a survey of 194 organizations (asset management scale over $2 trillion), 48% of respondents in 2006 adopted Smart Beta. More and more public fund companies in China have also included Smart Beta products in passiveExponentialThe focus of the product is in the direction of layout.

Liu Jun, director of investment division of Huatai Bairui Index, said that the company's product line will be considered from two dimensions in the future: First, the traditional broad-based index ETF has two 80% ratios in the ETF field, and the stock ETF accounts for all ETFs. The ratio is 80%, and the wide-based ETF accounts for 80% of the stock ETF. The wide-based ETF is the mainstream variety of the ETF market. It has huge market capacity and development prospects, and is also the focus of product development. Second, Smart Beta products. Factor-based investment strategies and instrumentalization will meet the diverse needs of institutional investors for index products.

He specifically mentioned that in the future, investment in FOF and annuity products requires more distinctive strategic and tool-based products as the underlying investment targets for asset allocation. Smart Beta ETF is an entry point for effectively connecting this huge demand.

However, in the short term, considering the increase in market acceptance, a process is needed. Some people in the industry believe that the initial scale of Smart Beta products will not be very impressive. However, considering that the ETF market is different from the actively managed products, this is a market where the first-mover advantage wins, so some companies intend to advance the card layout before the market really breaks out.

  Guotai FundLiang Xing, director of the Quantitative Investment Division, said that the current Smart Beta strategy is still relatively limited, focusing on factors such as equal rights, dividends, and low waves. The industry is still in the layout incubation period. And the Smart Beta Index ETF has certain requirements for investors' professional knowledge and requires more in-depth investor education. At present, there is no broad-based and industry index ETF, but the company will also reserve it as a type of product in advance for future development needs.

(Article source: China Securities Journal)

                                (Editor: DF407)


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