Summary of Key Points
Wu Qing, the chairman of the China Securities Regulatory Commission (CSRC), emphasized at a meeting with the Fund Industry Association that the fund industry must adhere to the fiduciary duty of "managing assets on behalf of clients entrusted by them" and prioritize the interests of investors. The current scale of the fund industry exceeds 85 trillion yuan, serving 860 million people, and it is transitioning from a focus on scale to a focus on returns. Regulatory authorities have introduced a series of policies (such as new private fund information disclosure regulations and public fund fee reduction reforms) to protect investors. Private funds are moving away from "wild growth" and entering a phase of standardized improvement; public fund reforms have reached a critical stage where it is necessary to consolidate the achievements. Industry insiders call for enhancing investor returns and experience through compliance building, performance evaluation linked to investment outcomes, and educational support.
I. Comprehensive Policy Measures: Investor Protection Becomes a Priority for Regulation
In the past year or so, regulatory authorities have introduced a series of stringent measures to protect investors in the fund industry:
- For private funds: The "Private Fund Information Disclosure Measures" issued in March 2025 require "penetrating supervision," which means making the underlying assets and investor information public, breaking the previous secrecy practices. In June, the State Council's "Guiding Opinions" went even further by directly canceling the registration of illegal or non-compliant private funds that have been out of contact for a long time and requiring local governments to help resolve related risks.
- For public funds: The three-step fee reduction initiative started in 2023 will be fully implemented by 2025, saving investors over 50 billion yuan in fees each year. The revised "Performance Evaluation Guidelines" issued in April this year link investor profits to the performance of fund managers and executives, requiring them to purchase their own funds, thus aligning the interests of managers and investors.
These policies are not just empty slogans; they directly tie investor interests to the fundamental operations of the industry.
II. Private Funds: Moving from "Wild Growth" to "Precision Management"
The private fund industry used to be somewhat chaotic, with many unprofessional institutions, difficulties in raising funds (as capital was concentrated in a few leading firms), and frequent violations (such as misappropriation of funds and false advertising). After regulatory intervention, more than 20,000 non-compliant firms have been eliminated, leaving behind high-quality managers managing assets worth hundreds of billions or even trillions of yuan. The industry is now focusing on improving quality rather than just increasing volume.
Industry experts suggest the following changes:
- First, follow the rules: For example, Tang Yiting from LeRui Asset Management suggests investing heavily in risk control systems that incorporate macroeconomic analysis and credit risk assessment, as well as providing basic training for employees to ensure they do not cross the line.
- Second, focus on returns: Avoid solely pursuing scale; instead, aim to generate real profits for investors and avoid blindly following market trends (such as jumping into AI investments without proper research).
- Serve long-term funds: Funds dealing with social security and pension money require stable returns over the long term. Private funds should leverage their expertise to create products with low volatility to help manage and invest these funds wisely.
III. Public Funds: Reforms at a Critical Stage, Need for Further Efforts
Reforms in public funds have already shown results (such as fee reductions), but Chairman Wu Qing notes that we are now at a crucial point where we cannot relax our efforts. Industry insiders recommend the following:
- Performance evaluation should focus on investor returns: Jing Lei from Harvest Fund Management suggests adopting counter-cyclical investment strategies (buying when markets are down and avoiding excessive buying and selling). They also propose introducing variable fee structures where management fees are higher when profits are high, sharing losses when they occur.
- Products must meet diverse needs: Funds should be designed to suit different risk preferences (e.g., providing stable options for conservative investors and more aggressive equity-based products for risk-tolerant ones).
- Research capabilities must be strengthened: Wu Qing emphasizes that equity investment is a key strength of public funds, and efforts should be made to enhance research capabilities to deliver long-term returns based on professional expertise rather than luck.
IV. Investor Education and Support: From Rhetoric to Practical Assistance
Many investors lose money in funds not because of poor products but due to their own mistakes (such as chasing market peaks and troughs). Industry experts believe that education should go beyond mere advice; it should provide practical support:
- Personalized approaches: Using AI and big data, provide tailored content for different investors (e.g., teaching beginners how to choose funds and experienced investors how to adjust their portfolios). Offer timely comfort and guidance during critical market moments.
- Develop professional fund advisors: Allow experts to manage investors' assets, linking their earnings to the investors' long-term performance. This can encourage longer holding periods and reduce irrational behavior (such as selling funds at market downturns).
In short, the focus should shift from telling investors what to do to accompanying them in their investment decisions, helping them truly profit from their investments.
Conclusion
The core logic of the fund industry is clear: it is shifting from a focus on scale to a focus on returns. Regulatory authorities use policies to ensure compliance, institutions use professionalism to improve returns, and education provides support to enhance the investor experience. All these efforts aim to enable the 860 million investors to trust funds and truly benefit from the capital market. For ordinary investors, when selecting funds in the future, they should consider the regulatory records of firms, their performance evaluation mechanisms, and the quality of educational services. These factors will be important indicators of a fund's reliability.