Since the beginning of this year, more than 40 public fund products have reduced their overall fee rates.

Reporter: Chang Xiaoyu

On March 26, the Fuguo Fund announced a reduction in the management and custody fee rates for its Hong Kong Stock Connect Internet ETF (Exchange-Traded Fund) and its corresponding funds. The management fee rate was lowered from 0.5% per year to 0.15% per year, and the custody fee rate was reduced from 0.1% per year to 0.05% per year, both being the lowest tier among similar products. The new comprehensive fee rates will officially take effect on March 27.

According to Wind Information, as of March 26, the size of the Fuguo Hong Kong Stock Connect Internet ETF has reached 67.53 billion yuan, making it the largest cross-border ETF and single industry theme ETF in the market. Public information shows that the Fuguo Hong Kong Stock Connect Internet ETF closely tracks the CSI Hong Kong Stock Connect Internet Index, which selects 30 listed companies involved in internet-related businesses from the Hong Kong Stock Connect scope as index samples to reflect the overall performance of internet-themed listed companies within the Hong Kong Stock Connect. The Fuguo Hong Kong Stock Connect Internet ETF and its corresponding funds mainly focus on the Hong Kong internet sector, covering sub-sectors such as e-commerce, social media, and medical technology.

Recently, due to external factors, the Hong Kong stock market has experienced increased volatility. Tian Ximeng, the fund manager of the Fuguo Hong Kong Stock Connect Internet ETF, told the Securities Daily that there are currently three positive factors in the Hong Kong stock market: first, profit recovery is expected. The signal of “anti-involution” has been released, and the irrational subsidy war in the food delivery industry has been halted, which is expected to end the disorderly competition in the industry, potentially leading to a significant upward adjustment in overall profit expectations. Second, the iteration of large model technology and the imminent reshaping of valuations. Previously, the market was skeptical about the AI (artificial intelligence) model capabilities of leading internet companies, but this expectation is likely to reach a turning point in April, as relevant leading enterprises plan to release major version updates for large models, continuously enhancing their core technology layout in AI, cloud computing, etc. A substantive breakthrough in technological strength is expected to boost market confidence and drive valuation recovery. Third, risk appetite is rebounding. As the most pessimistic phase of geopolitical conflicts gradually passes, external pressures are likely to ease, which may lead to a rebound in global risk appetite. Overall, assets like the Hong Kong Stock Connect Internet ETF are expected to welcome dual opportunities for valuation and performance enhancement.

Previously, on March 24, the Fuguo Fund also reduced the comprehensive fee rates for six of its index products, including the Central Enterprise Dividend ETF Fuguo, Chip ETF Fuguo, Battery ETF Fuguo, and their corresponding funds. The management fee rates for these six products were lowered from 0.5% per year to 0.15% per year, and the custody fee rates were reduced from 0.1% per year to 0.05% per year. After the adjustments, the management and custody fee rates of these products have reached the lowest level among similar products.

The “Action Plan for Promoting the High-Quality Development of Public Funds” clearly requires “steadily reducing the cost for fund investors” and “guiding industry institutions to timely lower the management and custody fee rates of large-scale index funds and money market funds.” As the reform of public fund fee rates continues to advance, many public fund institutions are actively working to “reduce the burden” for investors. According to Wind Information, as of March 26, 40 public fund products have lowered their comprehensive fees this year.

A person from the product department of a large public fund institution in North China believes that lowering investment costs will help attract more medium- and long-term funds into the market through public funds. At the same time, fee rate reforms will incentivize public fund institutions to enhance their overall competitiveness, making those companies that prioritize investor interests and possess solid investment capabilities and good compliance and risk control more advantageous, thereby promoting the overall quality improvement of the industry.

(Editor: Xu Nannan)

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