Caixin Weekly | Comprehensive Reform of Public Mutual Funds (AI Translation)
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文｜财新周刊 全月
By Caixin Weekly Quan Yue
文｜财新周刊 全月
By Caixin Weekly Quan Yue
2025年5月7日，证监会正式发布《推动公募基金高质量发展行动方案》（下称《方案》），旨在建立以投资者回报为导向的评价体系，引导基金行业回归本源、增强长期投资能力。一周以后，银行板块全面上涨，反映了业绩基准在市场上的重要性。
On May 7, 2025, the China Securities Regulatory Commission (CSRC) officially released the "Action Plan to Promote the High-Quality Development of Public Mutual Funds" (hereinafter referred to as the "Plan"), aiming to establish a performance evaluation system centered on investor returns and to guide the fund industry back to its roots while strengthening long-term investment capabilities. One week later, the banking sector saw a broad rally, reflecting the importance of performance benchmarks in the market.
在不少基金公司“以规模论英雄”的考核体系和激烈竞争中，短期业绩驱动了基金经理的投资决策。为了追求阶段性收益排名，不少从业者倾向于紧跟市场热点，导致投资风格漂移的现象屡屡发生。此类“短视操作、规模膨胀、净值回撤”的循环，削弱了公募基金的长期投资能力与受托责任，亦引发投资者信任危机。
Within the highly competitive environment of many fund companies, where performance is often evaluated by assets under management, short-term results have become the main driver of fund managers’ investment decisions. In pursuit of top rankings in periodic returns, many industry professionals tend to chase hot market sectors, resulting in frequent shifts in investment style. This cycle of “short-term trading, asset expansion, and net value retracement” undermines the long-term investment capability and fiduciary responsibility of public mutual funds, while also sparking a crisis of investor trust.
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- In May 2025, China’s securities regulator launched reforms requiring public fund managers’ fees and compensation to be linked to medium- and long-term investment performance, shifting away from short-term scale-based incentives.
- The reform introduces a floating fee mechanism tied to performance benchmarks, mandates stricter disclosure and governance, and aims for 60% of new equity products to have floating fees within top fund firms by 2026.
- Over 2024, average US equity mutual fund fees dropped to 0.40%; China’s fee reforms draw on such international practices to improve investor alignment and long-term fund industry health.
[para. 1]
- July 1930s：
- U.S. investment advisers commonly charged performance fees based on returns, but were not accountable for losses, leading to the Investment Advisers Act of 1940.
- 1940：
- The U.S. enacted the Investment Advisers Act, restricting performance-based fees.
- 1970：
- The SEC promoted an amendment abolishing special privilege to collect performance fees for registered investment company advisors; introduced 'symmetrical fulcrum fee' system.
- 1985：
- SEC set the qualified investor threshold for performance fees at $500,000 investments or $1 million net worth.
- 1996：
- The U.S. permitted the collection of performance fees for non-U.S. investors. The weighted average expense ratio for U.S. equity mutual funds was 1.04%.
- 2012：
- SEC raised the qualified investor threshold to $1 million investment or $2 million net worth, introducing inflation adjustments.
- In 2016：
- Statistical data revealed average annual compensation per employee in China's top-tier fund management companies was 1.5472 million yuan.
- 2019 to 2021：
- Rapid growth period for Chinese public mutual funds; year-end bonus details were not publicly disclosed.
- July 2020：
- The CSRC issued a document establishing a deferral mechanism for performance evaluations of key positions linked to long-term investment performance.
- Since 2021：
- China's equity market has been on a continuous decline; overall bonus levels in the fund management industry decreased 2022-2024.
- June 2022：
- Asset Management Association of China issued guidelines requiring at least 40% of the compensation for key personnel such as fund managers to be deferred and at least 30% of annual performance-based compensation to be used to purchase public funds managed by the same company.
- May 2022 to May 2025：
- Over the past three years, percentages of funds outperforming and underperforming benchmarks in the Chinese public mutual fund sector were reported.
- Since July 2023：
- China’s public mutual fund industry began a comprehensive overhaul to lower fees, starting with management fees and expanding to trading commission rates, distribution fees, and fee disclosures.
- March 2024：
- Fidelity Contrafund adjusted its fixed management fee mechanism in the U.S.
- As of the end of 2024：
- There were a total of 75 public mutual funds adopting the floating management fee model in China, with a combined managed asset size of 78.329 billion yuan.
- As of the end of 2024：
- Asset-weighted average expense ratio for U.S. equity mutual funds had fallen from 1.04% in 1996 to 0.40% in 2024; similar declines reported for bond and money market funds.
- By the end of 2024：
- Assets under management in index mutual funds and ETFs accounted for 51% of the U.S. long-term fund market.
- Late 2024：
- Many mutual fund companies did not finish paying 2023 year-end bonuses until this time.
- As of May 12, 2025：
- There were 4,019 fund managers in China’s public mutual fund industry.
- May 7, 2025：
- The China Securities Regulatory Commission (CSRC) officially released the 'Action Plan to Promote the High-Quality Development of Public Mutual Funds.'
- May 14, 2025：
- One week after the plan's release, the banking sector saw a broad rally reflecting the importance of performance benchmarks in the market.
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