Core views:
Mutual funds are becomingfinanceA new hot spot for the system. Take chargeBlackRockLawrence Fink became the new “King of Wall Street”. As of the end of 2019, BlackRock managed assets worth $7.4 trillion, making it the world's largest asset management agency. Pioneer Group is in second place with $6.2 trillion under management. The global achievements of BlackRock and Pioneer indicate that asset management is becoming a new hot topic in the financial industry.
The domestic public fund industry is developing rapidly, and the product structure is expected to improve. The domestic asset management industry is facing internal and external changes, and is about to usher in new development opportunities and a new situation of diversified healthy competition. Among them, the overall public fund industry has developed rapidly. Over the past 20 years of development, the size and quantity of public funds have continued to rise steadily, and have occupied an important position in the capital market. In particular, in 2014-2019, the compound growth rate of the net worth of public funds reached 26.61%, accounting for 26.61% of the total market value of A shares and their share in GDP. In 2019, the management scale of public funds in China exceeded 14 trillion yuan. Against the backdrop of easy liquidity, the development prospects are still very broad. At the same time, the problem of the low share of equity products is also expected to be improved.
Implications for the development of mutual funds in the US. There are several sets of data on US mutual funds that deserve our attention:
(1) According to statistics from the Association of American Investment Companies, the size of US mutual funds at the end of 2019 was 25.7 trillion US dollars, accounting for more than 100% of GDP and more than 50% of the total market value of the stock market; (2) in terms of product form, US mutual funds are mainly equity investments; (3) pension accounts provide about 46% of the funding source for US mutual funds. Overall, the current state of China's public fund industry is quite similar to that of the US in the 70s of the last century, while the 70s and 90s were a period of rapid development of US mutual funds. Taking beauty as a mirror, China's public fund industry has a lot of room for growth.
BlackRock and Pioneer Group Research: Embracing Technology Empowerment and Index Products. BlackRock has expanded rapidly through successful and continuous mergers and acquisitions, while attaching great importance to the development of technology finance and risk management technology. The Aladdin system it has developed has become the most important work platform for the asset management industry. Pioneer Group focuses on passive investment areas such as index funds, and implements low interest rates throughout. The unique shareholding structure of investors ensures that low interest rates are the common goal pursued by investors and fund companies, and the scale of management continues to expand.
Brokers with a deep layout in the public fund industry will benefit from multiple dimensions. Fund companies' rich variety of products can help brokerage firms expand their product range, enhance asset allocation service capabilities, and accelerate the pace of wealth management transformation of brokerage firms. At the same time, the two have a synergistic effect in research, custody, securities lending, etc. Furthermore, the public fund business provides a stable source of profit for brokerage firms, which is in line with the development trend of brokerage firms increasing their share of fee-paying businesses.
Investment advice: It is recommended to focus on leading companiesCITIC Securities (600030.SH)/(06030.HK),China Financial Corporation (03908.HK),Huatai Securities (601688.SH)/HTSC (06886.HK),Guotai Junan (601211.SH)/(02611.HK) etc.
Risk warning: The economic downturn has exceeded expectations; the capital market has fluctuated greatly, etc.