The so-called help funds are often "enthusiastic" when the new base is issued, and "heartless" after the new base is listed.
Recently, many newly launched ETF products have seen such a scene: many of the newly launched products that have been raised in just two or three days have been redeemed on the first day of listing, or even nearly half of them were redeemed one day. Among the ETFs listed in May, about half of the remaining shares are less than half of the shares when they were listed, and more ETF funds have less than 100 million shares.
The reporter of China Securities Journal visited and investigated many public offering institutions, and learned that ETFs were subject to a large number of redemptions when they were just listed, hiding multiple factors such as helping funds and arbitrage motives. When ETF has become the main battlefield of new base issuance, there is no shortage of fund companies to "rush" to issue and seek financial support to meet the scale requirement of new base to reach 200 million yuan as soon as possible. However, because a lot of help funds are calculated on a daily basis, it is easy to be redeemed upon listing. In addition, the discount of ETF in the secondary market will also trigger some investors to redeem arbitrage.
Some insiders believe that we should remain calm in the midst of the bustle. The layout of ETFs should not be lumped together. We need to consider the business situation of fund companies. Even if we want to layout, we should also pay attention to differentiation. ETF products may try to break the requirements of establishment scale and move towards the development path of "becoming smaller and larger".
"Shipping upon listing" is frequently performed
Taking May as an example, as of the time of press release, almost all of the more than 10 ETF products listed and traded in the whole market in the same month had their shares shrunk on the day of listing, and more than 100 million ETFs were redeemed on the day of listing. Moreover, the redemption shares of the products accounted for nearly 50% of the total shares listed on the market on the same day, presenting a scene of "shipping when listed, half of the market in a day".
It is worth noting that this ETF, which was suddenly redeemed in large amount on the first day of listing, is still a dividend product that has been popular in the market recently, and the popular fund type seems to have failed to keep the pace of fund holders. A large number of redemptions are made upon listing, which is usually considered by the fund industry as a potential source of helpful funds. Surprisingly, according to the disclosure of the ETF listing and trading announcement, the total number of fund shares held by institutional investors is less than 40 million, even less than a fraction of the redeemed shares on the same day. "From this point of view, most redemptions may be triggered by large individual investors." It is analyzed by insiders.
It is reported that the ETF raised more than 300 million yuan in total within four days of its issuance, and 1700 effective subscribers in total, with an average subscription of more than 170000 yuan per household. Why did individual investors redeem on the first day of listing? Some fund personages said in an interview that it was really a bit strange and did not understand the reason behind it. Judging from the trading performance of the ETF on the first day of listing, there was no significant increase on that day, with a closing increase of 0.3% and no obvious discount. In the following trading days, the price of the ETF rose continuously and hit a new high since listing on May 22, about 4% higher than the first day of listing. People from the market department of several fund companies said that unless the performance is particularly poor or major negative events occur, the impact of normal individual investors' redemption on ETFs is relatively limited. From this point of view, it is not ruled out that the majority of the above ETF holders entered the market initially to help the establishment of products.
In addition to the first day of listing, many ETFs have been continuously redeemed. According to rough statistics, as of May 22, in less than a month, about half of the ETFs listed and traded in May had redeemed shares accounting for more than 50% of the listed shares, and there were more than 80% of the redeemed shares. The latest shares of many ETFs were less than 100 million.
Help the fund leave the site or the main reason
It is not uncommon for a fund to encounter large redemption and then face liquidation risk soon after its establishment or listing. However, why do ETFs, which are popular among investors, also face such difficulties? On the one hand, the offering was quickly completed in only two or three days, and on the other hand, the company was heavily redeemed just after listing. What's the mystery behind the double sky of ice and fire?
"It just happened that the ETF sector performed quite well, and we are also optimistic about follow-up investment opportunities, so we took the time to set up the product." A person involved in the fund issuance told the China Securities Journal reporter that now the issuance of active equity products is under pressure, and the market is generally more optimistic about ETFs, which can be relatively easy to issue. As for why the redemption occurred in a short period of time, most funders believe that it is likely to be caused by helping the funds leave the market.
"It is not so easy for newly developed products to reach the scale of 200 million yuan in a short time." Some investors believe that when the establishment of newly developed products is difficult, seeking help funds has become a well-known routine in the industry. Once the help funds withdraw, it will naturally show net redemption, especially when this part of funds accounts for a relatively high proportion, The impact of its departure on product share is more obvious. "There is a cost to help fund, and some costs are calculated on a daily basis," said a person in the market department of a fund company.
In addition, some insiders said that redemption is also easy to trigger when there is a large discount in the exchange trading price of ETFs (the secondary market price is less than the net value of fund units). The specific operating principle is that investors buy ETFs with discounts from the secondary market, redeem ETFs into a basket of stocks in the primary market, and then sell a basket of stocks in the secondary market to make a profit. Participation in ETF arbitrage requires a high capital threshold, and the business rules are relatively complex, which is difficult for ordinary investors.
Avoid falling into "internal volume" and wasting resources
During the new product release period, the whole company struggled to make a fuss, but soon after the product came out, it encountered exit dilemma, which has gradually triggered deep thinking in the fund industry. Especially for ETF products, their issuance costs are often higher than other products. One ETF fund manager told China Securities News that "the last product will buy an IT system, and a system alone may cost hundreds of thousands of yuan or even hundreds of thousands of yuan." If the fund company is liquidated soon after listing, it will cause great losses to the fund company.
A fund official said frankly: "There is no way. Everyone is planning. If you don't plan, you will panic. Although it may not be a good result, it is at least better than never having done it at all. Moreover, active equity products are more difficult to sell now, and ETF products are relatively good." Another fund company ETF business department said: "ETF has indeed gradually become an important player in some companies' scale."
ETF layout requires a lot of manpower and material resources. Once it is listed for a short time, it will be liquidated, which is easy to cause losses to fund companies; However, in the face of ETF's broad market space, investor enthusiasm and peer pressure to enter the market, it seems unwilling not to arrange. How to balance the two situations? Some fund insiders believe that the ETF layout should not be in a crowd, but should be calm when in the midst of the bustle. It should be prudent to make decisions based on the company's own business advantages. Even in the layout, attention should also be paid to the selection of differentiated varieties to avoid falling into unnecessary "involution" and resource waste.
Another ETF fund manager pointed out that the phenomenon of ETF being redeemed largely soon after its listing, or even becoming a mini product, may be because "the real market demand of this product is just like this, which is not enough to support the scale of 200 million yuan". Therefore, the development of ETF products may try to break the requirement for the establishment scale of 200 million yuan. With reference to the practice of overseas seed funds, it does not pursue the number of issuance scale. The ideal model is to "grow small and grow large", and gradually increase the scale. This can not only reduce the occurrence of ETF seeking help funds, but also reduce the pressure of fund companies to launch new funds and invest more resources in fund operations after issuance.
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