Recently, Cathay Fund announced the "report card" of the fund products under management in 2024.

Overall, the net asset value of Guotai Fund will grow steadily in 2024, and as of the end of 2024, the total net asset value of the fund will be 710.216 billion yuan, a year-on-year increase of 17.37%, ranking 14th among public fund management companies, the same as the previous year.

The performance of fixed income funds is more stable, while the proportion of equity funds has declined for four consecutive years, especially the scale of active equity funds has declined significantly, and many partial stock funds have suffered losses and plummeted in scale for many years, and their management capabilities have been tested.

Just when public offering institutions are active in self-purchase in 2024, Cathay Fund has redeemed a number of products on a large scale, especially in the fourth quarter, the net redemption amount was as high as 424 million yuan, and many ETF products were redeemed by "clearance".

What kind of chess is the "boss" of the industry ETF playing?

　　1

The proportion of equity funds has decreased for 4 consecutive years

CSI A500ETF won the championship in one fell swoop

As of the end of 2024, the total net asset value of the fund was 710.216 billion yuan, a year-on-year increase of 17.37%, ranking 14th in the public offering in the past two years.

From the perspective of different types of funds, the scale of fixed income funds has grown faster, of which the net asset value of currency and bond funds is 317.755 billion yuan and 175.378 billion yuan respectively, accounting for 69.41% in total, accounting for four consecutive years.

In contrast, the scale of equity funds has grown slowly, with the net asset value of equity and hybrid funds being 158.912 billion yuan and 25.277 billion yuan respectively, accounting for 25.93% in total, accounting for 4 consecutive years, and a decrease of 21.04 percentage points compared with 46.97% at the end of 2020.

The

scale of active equity funds has declined significantly, with equity funds mainly supported by ETFs, while the scale of hybrid funds has declined for three consecutive years, with a three-year decline of 61.77%.

Source: Wind

According to the "Implementation Plan for Promoting the Entry of Medium and Long-term Funds into the Market" jointly issued by the Central Financial Office, the China Securities Regulatory Commission, the Ministry of Finance, the Ministry of Human Resources and Social Security, the People's Bank of China, and the State Administration of Financial Regulation, it is necessary to guide and supervise public fund managers to steadily increase the scale and proportion of equity funds.

Wang Zhaojiang, manager of Zongfan Private Equity Fund, believes that the "bias" of fund companies mainly stems from the uncertainty of the global macroeconomic environment, and the lack of full grasp of the international situation and the direction of policy changes, resulting in the selection of assets, they are more willing to choose bonds with higher certainty and higher security level for allocation.

Wang Zhaojiang also said that in the future, the scale of rights and interests will gradually increase, on the one hand, the situation of the Sino-US game will become clearer, and the policy guidance will be clearer; On the other hand, due to the strong optimism of financial institutions and central enterprises for the country's development prospects and their resolute support for the capital market, they will guide the gradual inflow of funds into A-shares, which will stimulate the enthusiasm of the fund to allocate stocks, so as to further expand the scale of management.

The size of Guotai Securities' equity fund will increase by 11.31% in 2024, and the growth trend has been obvious in the past two years, among which the rapid development of ETFs has contributed to it.

In ETFs, especially broad-index funds, the head effect and first-mover advantage are obvious, and the market is fiercely competitive. Guotai Fund judged that the broad index ETF track was seriously congested and missed dividends, and achieved corner overtaking by vigorously deploying industry ETFs.

In 2014, Guotai Fund set up a quantitative investment department, and in the fourth quarter of 2015, it was ready to declare securities ETFs and military ETFs, and was successfully issued in July 2016.

Source: Canned Gallery

According to Wind data, as of the end of 2024, the net asset value of Guotai Fund's non-monetary ETF (concept) was 148.459 billion yuan, ranking 6th among public funds, but the ranking fell 2 places from the end of 2023, of which the total scale of industry ETFs ranked 1st.

The largest ETF product of Guotai Fund is Guotai CSI All-Index Securities Company ETF, with a net asset value of 28.363 billion yuan at the end of 2024, a year-on-year decrease of 12.7%, and a decrease of 6.806 billion yuan in the fourth quarter alone. The investment income performance in the past 6 months has been poor, with a similar ranking of 2460/3077.

The scale of Cathay CES Semiconductor Chip ETF fell even more, with the net asset value falling by 25.92% to 12.741 billion yuan in 2024, which is also the largest decline in the fourth quarter, ranking fourth in the scale of Cathay Fund ETF products. However, the recent investment income of this product is outstanding, and the ranking of the same category in the past 6 months is 74/3077.

In addition, there are a number of ETF funds that have suffered a significant decline in size in the fourth quarter of 2024. In fact, since the "924 market", A-shares have rebounded strongly in the fourth quarter, but the scale of many ETF products of Guotai Fund has dropped sharply during this period, what happened?

However, with the strong outbreak of the CSI A500ETF at the end of the year, Cathay Fund quickly came out of the circle and became the "leader" in the track in one fell swoop.

2024 is the year of the outbreak of the CSI A500ETF, the index is also known as the Chinese version of the "S&P 500", from the birth of the first CSI A500ETF fund on September 20, the scale exceeded 320 billion yuan in less than 3 months, during which 27 ETFs were listed on the floor and 27 public offering institutions joined the scale battle. In 2025, the number of fund companies that have issued or queued to issue CSI A500ETF will further increase.

Source: Canned Gallery

Naturally, Guotai Fund did not miss this opportunity and launched the Cathay CSI A500ETF on September 26, 2024, with a scale of more than 10 billion yuan in 7 days of listing and 20 billion yuan in 16 days. By the end of 2024, the scale will reach 28.152 billion yuan, ranking as the champion of CSI A500ETF scale.

　　2

A single product has a loss of 474 million in 3 years

The performance of active equity funds has underperformed its peers in the past five years

At the same time as the rapid development of ETFs, Guotai Fund has been unable to seek breakthroughs in active equity funds, whether in terms of product scale or investment performance, Guotai Fund is at a disadvantage, and its investment income has been poor for a long time, which is lower than the level of its peers.

According to the data of Tiantian Fund Network, stock funds, mixed funds, and index funds have underperformed the average level of the same kind for most of the time in recent years. Among them, equity funds have underperformed the average level of the same category in the past 6 months, 1 year, 3 years, and 5 years; Hybrid funds have underperformed the average level of the same category in the past 1 year, 3 years, and 5 years. Index funds have underperformed the average level of the same category in the past 6 months, 1 year, and 3 years.

Source: Tiantian Fund Network

Founded in August 2015, Cathay Internet + stock is a 10-year-old fund, which ushered in an explosive period in 2017, with a sharp increase in product net value and scale, reaching 4.592 billion yuan at the end of 2017.

However, the scale has been shrinking since then, and the net assets as of the end of 2024 will be 603 million yuan, a year-on-year decrease of 13.36%, and a decrease of 86.22% from the peak seven years ago.

Source: Wind

Since the second half of 2021, the net value of the product has been in a volatile downward trend, with returns of -27.05%, -15.49%, -4.35%, and -9.53% in 2022, 2023, 2024, and 2025 so far. It ranks low among similar products, ranking 882/1001 in 2025.

In 2022, 2023, and 2024, it will lose 310 million yuan, 133 million yuan, and 32 million yuan respectively, and the total loss in three years will reach 474 million yuan.

Source: Wind

It is worth noting that Cathay Internet+ shares also changed fund managers in August 2023, and the current fund manager is Sun Jiaxu, with a return of -18.59% so far in his tenure. Prior to that, Sun also managed another mixed equity fund, Cathay Golden Bull Innovation Growth Blend, with a tenure return of -17.5% from June 2022 to September 2023. Lack of experience in fund management, only managed 2 products, and the return of the fund has a large loss.

In recent years, the turnover rate of the fund has been rising, with a turnover rate of 639.1% in 2024, and as of the end of 2024, the holdings of more than 5% of the stock holdings are Kingsoft Office (688111. SH), Goertek (002241. SZ), Cambrian (688256. SH), SAIC Motor (600104. SH), Hengxuan Technology (688608. SH）。 Compared with the end of the third quarter of 2024, the top 10 holdings of stocks have changed significantly, and only 2 stocks are retained.

The manager pointed out in the 2024 fund annual report that the fund mainly invests in the growth style throughout the year, and the results are not ideal, and the investment opportunities in growth stocks are concentrated in a very small number of key stocks in the subdivision track, with high stock selection requirements, and the fund operation has insufficient grasp of certainty, and the market still shows a lack of confidence in the 24 years, and in the face of unsatisfactory short-term economic growth, it has increased its requirements for certainty and sought stocks with low valuation, high quality and growth.

Source: Canned Gallery

The Cathay Pacific Health Equity Fund is similar, an 8-year-old fund, which has also suffered continuous losses and a sharp decline in scale in recent years. Since 2022, it has continued to lose money, with a loss range of 35.41% in the past three years, and a similar ranking of 837/1001 in 2025.

Source: Wind

As of the end of 2024, the net assets were 870 million yuan, a year-on-year decrease of 54.62%, and a decrease of 78.26% from the peak of 4.002 billion yuan at the end of the first quarter of 2023.

In terms of product holdings, stock holdings accounted for 92.31% at the end of 2024, subject to style factors, mainly focusing on pharmaceuticals, new energy and other fields. In the product's 2024 annual report, the manager pointed out that it is deeply sorry and remorseful for the product to significantly underperform the benchmark and peers, and will conduct an in-depth review and optimization of the tracking portfolio.

A number of active equity funds, such as Cathay Pacific Intelligent Automobile Stocks, Cathay Pacific Juxin Value Advantage, Cathay Jiangyuan Advantage Select Mix, Cathay Golden Eagle Growth Mix, Cathay Smart Equipment Stocks, Cathay Zhiyuan Advantage Mix, Cathay Golden Bull Innovation Growth Mix, and Cathay King Dragon Industry Mix, have suffered significant losses and continued to decline in scale in recent years.

In addition, as of the end of 2024, there are more than 50 equity funds and hybrid funds with a net asset value of less than 50 million yuan, and the risk of liquidation is relatively large.

There is no problem in maintaining a good and steady style, but if you can't take the initiative and seek breakthroughs in the field of active equity, once you are thrown too far by your peers, I am afraid it will be difficult to catch up.

　　3

The net redemption in one quarter exceeded 400 million yuan

"Liquidation" exit from multiple ETF funds

It

is common for public fund companies to purchase their own products, which is often a kind of confidence transmission and is bound to the interests of investors. According to Wind data, in 2024, 152 fund companies will make self-purchases, with an annual subscription amount of 371.022 billion yuan, an annual redemption amount of 363.982 billion yuan, and a net subscription amount of 7.04 billion yuan.

The net subscription amount of Guotai Fund in 2024 will reach 157 million yuan, and the subscription amount in the first three quarters is relatively large. Not long after the issuance of the China Securities A500ETF, on October 31, 2024, Guotai Fund publicly announced that it had purchased 30 million yuan to share risks and benefits with investors.

Source: Guotai Fund WeChat public account

However, in addition to this product, Guotai Fund redeemed a number of products on a large scale in the fourth quarter, with a net redemption amount of 424 million yuan, ranking fourth among all fund companies, and the net subscription amount of the whole industry during this period was 2.079 billion yuan.

13 funds have a net redemption amount of more than 10 million yuan, except for Cathay Pacific Currency A, which has a net redemption amount of 130 million yuan, and the other 12 are ETF funds, including China Thai SSE Composite ETF Connect A, Central Enterprise Win-Win ETF, and Cathay CSI Machine Tool ETF with a net redemption amount of more than 50 million yuan.

Cathay SSE Composite ETF Connect is an initiation fund established in January 2021 with 10 million shares subscribed and held for no less than 3 years. At the beginning of the fourth quarter of 2024, the manager held 60.696 million shares, and only 1.0436 million shares remained at the end of the period, with a redemption rate of 98.28%. The redemption amount of A shares reached 70.3421 million yuan.

Source: Cathay SSE Composite ETF Connect Q4 2024 Report

As of the end of December 2024, the net assets of Cathay SSE Composite ETF Linked A/C were RMB202 million, down 53.28% from the end of September.

In addition, ETF funds such as the Central Enterprise Win-Win ETF, Cathay CSI Machine Tool ETF, Cathay CES Semiconductor Chip Industry ETF Connection, and Cathay CSI Animation and Game ETF also suffered from the "clearance" redemption of the manager, holding 45 million, 49.001 million, 10 million, and 10.2551 million shares at the beginning of the fourth quarter, respectively, and the shares at the end of the period were directly cleared, with a transaction amount of 67.398 million yuan, 52.9443 million yuan, 14.801 million yuan, 11.3752 million yuan.

At a time when favorable policies continue to be released and the A-share market is picking up strongly, what is the reason why Guotai Fund chooses large-scale redemption of many ETF funds? Will it shake investor confidence?

Source: Canned Gallery

Generally speaking, fund companies may redeem their own products for a variety of reasons, such as poor fund performance, poor market environment, reduced investor trust, and the exit of "help funds" in the early stage of establishment.

Wang Zhaojiang said that self-purchase is mainly due to optimism about the market, determination and responsibility for the good performance of managed funds. The large-scale redemption is mainly due to the lack of confidence in the market and the lack of sufficient awareness and patience for investment. Large-scale redemption leads to a significant decline in the scale of the product, and the impact on performance is half of the pros and cons, if the scale is reduced, the management pressure will be reduced, and the net value may go up, but the redeemed investors will not enjoy the benefits.

　　4

Revenue and net profit fell for the first time in nearly five years

The chairman and general manager were replaced

Founded in March 1998, Guotai Fund is the earliest public fund management company in China, with a total of 256 public funds, 13 pension products and 336 asset entrustment portfolios under management by the end of 2024.

Although there is still a certain gap between the trillion scale of the head China Asset Management, Southern Fund, Bosera Fund, Wells Fargo Fund and Harvest Fund, compared with Changsheng Fund and Dacheng Fund, the scale of Guotai Fund has been 14-15 in the industry in the past three years, and its development is relatively stable.

According to Wind data, in 2023, the total operating income of Guotai Fund will be 3.359 billion yuan, a year-on-year decrease of 2.33%; net profit was 1.079 billion yuan, down 12.3% year-on-year. This is the first time in the past five years that Guotai Fund has experienced a decline in total operating income and net profit at the same time.

Source: Wind

With the recovery of the securities market, since the third quarter of 2024, the investment performance and profitability of fund companies have improved. According to the data of Tiantian Fund Network, the funds under Guotai Fund will achieve an income of 6.73 billion yuan and a profit of 27.239 billion yuan in 2024, a significant improvement over the past two years.

Source: Tiantian Fund Network

In 2024, Cathay Fund will also experience a change of first and second leaders. First, Zhou Xiangyong was promoted from general manager to chairman in March, and then Li Sheng was "parachuted" from China Construction Investment to Guotai Fund as general manager in July.

Zhou Xiangyong is a "veteran" who has served in Guotai Fund for 14 years, joined Guotai Fund in January 2011, and has served as assistant general manager and deputy general manager, successively in charge of e-commerce, marketing and investment; Since July 2016, he has served as the general manager and director of the Company. In the early days, he served as a senior business manager and head of the business operation group in China Construction Investment.

Li Sheng is a "financial veteran" with 28 years of experience, having worked in China Construction Investment for 19 years, and has served as the investment general manager of the financial market department of China Construction Investment and the general manager of China Construction Investment (Hong Kong).

The chairman and general manager are both from the major shareholder China Construction Investment, and after the change of generals, Guotai Fund is facing a new situation both internally and externally, on the one hand, the proportion of equity scale continues to decline, and the performance of active equity investment is poor; On the other hand, the rate reform of the public fund industry is steadily advancing, and the income pattern of managers in drought and flood is being impacted.

Under the leadership of the new general, can Cathay Fund reverse the slow growth and poor investment performance of equity funds? Can you stay ahead of the curve in the sector ETF space? Let's talk in the comment section.