Summary of Key Points
Recently, star fund managers such as Zhang Kun and Liu Yanchun have hired additional personnel to co-manage their funds. This is not a sign of departure but a practical response to industry challenges like performance pressure, limitations in their areas of expertise, and the burden of managing large portfolios. The co-management model allows for better performance stability by distributing tasks among multiple individuals (with complementary or similar styles covering different industries), potentially breaking through the individual manager's capacity limits and reducing reliance on these star managers. However, this approach has its limitations (for example, it may not perform well in extreme market conditions). In the future, it is likely that we will see a dual-track system consisting of "high-quality funds managed by individuals for specific sectors" and "equity portfolios managed collectively by teams."
Why Do Star Fund Managers Suddenly Prefer Co-Management?
The main reasons are performance pressure and limitations in their areas of expertise. This year, tech stocks have performed well, but star managers who prefer traditional blue-chip companies have seen poor results (with some co-managed funds losing 18%-25% so far). By hiring managers with expertise in tech or value investing, the fund styles can become more balanced. For instance, after Liu Yanchun hired Ke Haidong, the JingShun Great Wall DingYi Hybrid Fund became the only one of his managed products to generate positive returns.
Not only Zhang Kun but also star managers with large portfolios and average performance, such as Liu Gesong and Ge Lan, are adopting co-management. The essence is that it's impossible for one person to handle all market conditions; the scale is too large to manage effectively on their own, so they need to rely on a team to compensate for their weaknesses.
Co-Management Addresses Three Major Challenges in the Public Fund Industry
1. Breaking Through Capacity Limits: Consumer-themed fund managers may not understand cutting-edge tech, while growth-oriented managers may struggle with value investing. By dividing tasks among multiple people, a wider range of market sectors can be covered, reducing the risk of missing out on opportunities (for example, adding a tech manager to Zhang Kun's team would help them capitalize on the AI boom).
2. Reducing the Burden of Large Portfolios: When a fund exceeds 20 billion yuan in size, one person may struggle to keep up with research and portfolio adjustments. With multiple managers, the workload is distributed, allowing for more precise stock selection and preventing dilution of returns.
3. Reducing Dependence on Star Managers: In the past, the performance of funds often declined when star managers left. With co-management, each manager is responsible for only a portion of the portfolio, so if one leaves, only that section needs to be adjusted without affecting the overall portfolio, providing more stability for investors.
Two Main Co-Management Approaches and Their Differences
There are two common approaches in the industry:
- Cross-Style Balanced Approach (e.g., ICBC Leadway Three-Year Hold): Four managers with different styles (value, balanced, growth) work together towards a unified goal. The advantage is lower volatility (maximum drawdown of 18.98% in the past three years, compared to 20% for similar funds), but returns are more modest (annualized 9.21%). This approach is suitable for investors seeking stability, such as those with retirement savings.
- Same-Style, Different-Sector Focus (e.g., Yinhua Small and Medium-Cap): Each manager focuses on a specific sector (new energy/tech, consumer, hard tech), and they all use the same criteria for stock selection. The advantage is higher potential returns (annualized 36.91% in the past three years), but the downside is greater volatility (34.34%). This approach is better for investors who can tolerate fluctuations.
Co-Management Has Its Limits
- Inextensive in Extreme Market Conditions: For example, during the 2023 AI boom, balanced co-managed funds did not perform as well as those that focused solely on AI due to their diversified portfolios. As a result, the growth of co-managed funds was slower during the bull market (ICBC Leadway Three-Year Hold raised 1.8 billion yuan but currently has only 2.3 billion yuan in assets).
- Impact on Traditional Marketing: In the past, channels relied on star managers to attract investors; co-management weakens their individual influence, making it harder for retail investors to identify attractive new funds.
- High Management Complexity: Dynamic portfolio adjustments require frequent team coordination, which can lead to disagreements. Fixed allocation may also result in missing market opportunities.
Future Trend: A Dual-Track System
Co-management will not replace single-manager management but complement it:
- Single-Manager Approach: Suitable for creating specialized funds (e.g., focused on AI or new energy), offering higher returns but with greater volatility, suitable for investors seeking high returns.
- Team-Co-Management: Ideal for managing stable equity portfolios, suitable for retirement savings and other conservative investments. Regulatory initiatives (e.g., the 2025 Action Plan to Promote High-Quality Development of Public Funds) support this approach, with plans to increase its prevalence. However, transparency issues (such as disclosing each manager's responsibilities and portfolio allocation) need to be addressed.
In summary, co-management is a sign of industry maturity but not a panacea for all problems. When choosing a fund, consider your risk tolerance: opt for a cross-style co-managed fund if you want stability, or a single-manager fund focused on a specific sector if you seek higher returns.
(The entire analysis is written in plain language to make it easy for non-financial professionals to understand the core concepts.)