Against the background of a sharp increase in the expectation of stock market rebound, the "move" of basic people is producing a butterfly effect.
The reporter of the Securities Times noticed that on May 18, there were four partial debt funds that simultaneously issued a liquidation risk warning announcement, because the fund size declined sharply. At the same time, a partial debt fund facing liquidation is favored by investors because it has become a stock fund due to its large stock overweight.
Obviously, as the confidence of the stock market continues to rise, investors' risk preference quickly switches from defense to attack. The highly flexible public offering partial funds attract many low-risk capital inflows from the basic people because of the rapid "blood return" of the products.
Some partial debt funds outflow
Multiple products prompt risks at the same time
On May 18, it was rare for many partial debt funds to issue a fund liquidation risk warning at the same time, because the fund size has declined significantly.
A partial debt hybrid fund under Shenzhen public offering announced that if the net asset value of the fund continues to be less than 50 million yuan as of May 30, 2024, the net asset value of the fund has been less than 50 million yuan for 50 consecutive working days. In case of the above circumstances, the fund will enter into the fund property liquidation procedure from May 31, 2024, without the need to convene a general meeting of fund share holders for deliberation. After the fund enters into the liquidation procedure, it will stop handling subscription, redemption and other businesses. In case of the termination of the above fund contract, the fund manager will establish a fund property liquidation group in accordance with relevant laws and regulations, the fund contract and other provisions, Perform the fund asset liquidation procedures.
A partial debt product under a public offering in Beijing also announced that the fund has a situation that may trigger the termination of the fund contract. According to the Fund Contract, if the number of fund share holders is less than 200 or the net asset value of the fund is less than 50 million yuan for 20 consecutive working days, the fund manager should disclose it in the regular report; In case of the above circumstances for 50 consecutive working days, the Fund will enter into liquidation procedures and terminate in accordance with the Fund Contract, without convening a general meeting of fund share holders for deliberation. As of May 17, 2024, the net asset value of the fund has been less than 50 million yuan for 30 consecutive working days.
Another large public offering in South China also prompted the liquidation risk of its partial debt fund. The public offering announcement on May 18 pointed out that the net asset value of the relevant partial debt fund has been less than 100 million yuan for 30 consecutive working days, which may trigger the termination of the fund contract. The first quarterly report of 2024 previously disclosed by the fund shows that by the end of March 2024, the net asset value of the fund of this product has only been about 70 million yuan.
In addition, another head joint venture fund company also released the liquidation risk warning of its partial debt fund on May 18, announcing that as of May 16, 2024, the partial debt fund had had a net asset value of less than 50 million yuan for 45 consecutive working days. If the net asset value of the fund is less than 50 million yuan for 50 consecutive working days as of May 23, 2024, the fund will enter into liquidation procedures according to the fund contract.
The reporter of the Securities Times noted that the change of institutional holders' base holding strategy is an important reason for the sharp decrease in the capital scale of relevant partial debt funds and even forced to issue liquidation tips. According to the information published in the first quarterly report of the Fund, almost all of the four partial debt fund products that have issued the liquidation risk warning above have the situation that the proportion of institutional investors holding fund shares is close to or up to 20%. Taking one fund as an example, an institutional investor redeemed all 50 million funds held in March this year. After this redemption, by the end of March, another institutional investor held 38 million fund shares, accounting for 89.13%. This also suggests that the reason why the Fund issued the liquidation notice on May 18 is probably because the above-mentioned institutional investors holding 38 million funds also started to redeem.
The stock market is heating up rapidly
Funds start to "move" under the effect of making money
Behind the continuous redemptions of the above partial debt funds is the capital "moving" of Kemin due to the improvement of the stock market.
In fact, the above partial debt fund products that have issued liquidation tips are not poor in the performance ranking of similar funds, even relatively good. However, due to the low stock position of these partial debt funds, the elasticity is relatively small, and the increase is naturally small in the context of the rising stock market. In this way, the slightly more aggressive investors will naturally look down on them, and these funds will be difficult to retain funds.
Taking the related partial debt fund of a Shenzhen public offering company that suggests liquidation risk as an example, this product has achieved positive returns of about 4% this year, and it only lost 0.44% in the context of market volatility in 2023. Although the product will slightly increase the stock position by 4 percentage points during the first quarter of 2024, the total stock position still accounts for less than 20% of the fund assets. Therefore, in the context of the recent continuous rebound of the stock market and the improvement of market risk appetite, the fund's cumulative net worth rose only 3.47% in the last three months.
Similarly, another partial debt fund under the Northern Public Offering, which issued the liquidation risk warning, is also a product with relatively stable net worth. The fund has been steady since its establishment in June 2022, and even in the weak market environment in 2023, it will still achieve a positive return of about 2%. However, when the stock market environment changes, making the conservative strategy less attractive than the offensive strategy, the sudden "technical bull market" makes the low position strategy of the fund product difficult to attract holders.
According to the first quarter report of 2024 disclosed by the above product, as of the end of March, the stock position of the partial debt fund was only about 2%, scattered in 10 stocks, and the low stock position led to the net value of the fund rising only 0.87% in the latest month. Although it ran slowly, the steady strategy also made this partial debt fund gain about 3% income this year.
Obviously, many partial debt funds that have achieved positive returns of 3% - 4% within the year have issued liquidation risk warnings, largely because of the "technical bull market" atmosphere in the stock market, which makes some partial debt fund holders envy the stock funds that have increased more, thus leading to these partial debt funds no longer popular. Wind data shows that up to now, the fund performance with the highest return rate in the whole market has exceeded 30% this year, and even the highest return rate of index funds has reached 25%.
To avoid winding up
Partial bond fund stock conversion basis
In accordance with the above logic, the "move" of the funds of the base people clearly points to the stock funds.
For example, there was a partial debt fund that went from "dead to alive" to "alive and well" in just three months this year, which to a large extent explained why as many as four partial debt products released liquidation risk alerts one day, and answered what the product strategy was to avoid liquidation.
The reporter of the Securities Times noticed that a partial debt fund under a large public offering in South China had entered the quasi liquidation state at the beginning of January this year, and by the beginning of January 2024, only 12 million yuan of fund assets remained. The partial debt fund said in its periodic report: "The fund has a net asset value of less than 50 million yuan for 60 consecutive working days, and the fund manager is discussing and demonstrating a feasible solution."
Finally, the "solution" to solve the continuous shrinking of the above product scale and avoid liquidation is to convert the debt base into the stock base. Specifically, the stock position of the above partial debt fund soared from 0.27% at the beginning of January this year to 87.33% at the end of March this year. Such a high stock position actually means that the product style and risk return characteristics of this partial debt fund have changed greatly, and it has become a stock fund. The above changes in operation not only avoided the fate of liquidation of the fund product, but also led to the rebound of fund performance due to the rising stock market heat, and the scale of the fund product rose rapidly. By the end of March 2024, the partial debt fund that was once facing liquidation this week, after becoming a stock fund, its asset size has increased significantly from 12 million yuan at the beginning of the year to 198 million yuan, and the asset size has increased 15 times in three months.
"The Fund has performed well, on the one hand because it has increased the allocation of equity assets, and on the other hand because its grasp of the structure is relatively matched with the current market. Previously, the Fund's allocation of A-shares has been at a low level, but in the first quarter, the Fund increased its allocation of equity assets." The fund manager managing the above products said, The A-share market in early February of this year has very high allocation value, and the market has ushered in the bottom of valuation. The objective indicators such as P/E ratio, stock debt premium ratio, dividend ratio, etc. all show that the market is at the bottom of the historical large scale. 2024 contains rich structural opportunities both at home and abroad.
The seesaw effect of stock and debt appears
There is still some pressure in the bond market
In addition, the recent weak pattern of the bond market is another trigger for the outflow of funds from many debt biased funds.
In this regard, Wu Bingyan, the fund manager of Great Wall Fund, believes that on May 10, the Ministry of Finance issued the Notice on the Mobilization and Deployment Meeting for the Issuance of Ultra Long term Special National Debt, and the bond market was adjusted, among which the active bonds of 10-year and 30-year national debt were adjusted to 2.40% and 2.6075% respectively. On May 13, the Ministry of Finance issued the Notice on Announcing the Arrangement for the Issuance of General National Debt and Super Long term Special National Debt in 2024, giving the plan for the issuance of super long term special national debt, from late May to November, once every month for 20 years, twice every month for 30 years, and once every two months for 50 years, with a monthly net supply of about 200 billion yuan. Since this year, the main line of the bond market is the game between supply pressure and allocation force, so the market has paid high attention to the issuance of special treasury bonds. The launch of this special treasury bond issuance plan has a relatively slow pace, which has little impact on the bond market, so the negative situation has eased.
With regard to the pattern of weak bonds in the near future, a fund manager of E Fund believes that the main reason is that after the end of March, the bond yield has declined after a rapid decline, and with the confirmation of the issuance of trillions of ultra long-term special national bonds, the pressure of exchange rate depreciation has slightly increased, fundamentals have improved and other factors, the volatility of the bond market has significantly increased, And gradually turned into a pattern of shock.
A bond fund manager in Shanghai also believed that the relaxation of the real estate policy would cause a certain stage disturbance to the bond market, but would not constitute a substantial negative. Considering that the effect of the real estate policy needs to be verified, the general environment is still favorable for the bond market, but with the acceleration of government bond issuance, there will be a certain run on the allocation of bonds on the bank's balance sheet, After superposition, the growth rate of infrastructure investment in the market will be accelerated, which will increase the market risk appetite in stages and create pressure on the bond market.
Wei Fengchun, chief economist of Chuangjin Hexin Fund, said that the policy of the Federal Reserve has in fact formed constraints on domestic interest rate cuts. The idling of funds further weakened the liquidity, and the increase of bond supply in the second quarter is a fact. Therefore, it is a basic judgment that bond transactions continue to be suppressed. Because of the suppression of liquidity, only the rhythm of bond trading is affected. Based on the economic recovery brought about by the full liberalization of purchase restrictions on real estate, there is no sufficient evidence to judge the full bearish bond.
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