In recent weeks, the market for floating-rate funds has been buzzing with excitement as several new offerings are hitting the shelves just in time for year-end investmentsThis surge in floating-rate fund launches has garnered attention, especially in a climate where the overall new fund issuance market is experiencing a downturn.

The BoShi HuiZe fund announced on November 8 that it will be publicly sold starting November 16. On the same day, DaCheng ZhiXin's return fund also commenced its public sale, marking significant entries into the marketWith the year coming to a close, floating-rate products have become a focal point for investors seeking opportunities in the equity market.

Among the twenty funds that recently received approval, only two have officially been launched, while eight are in the process of issuance and another eight are still awaiting their issuance dates

Furthermore, it is anticipated that more funds will join the issuance fray in the upcoming weeksThis indicates a growing interest in floating-rate fund products as they present several advantages in a fluctuating market environment.

Looking at the two floating-rate funds that have successfully been established, the Jiaoying Ruiyuan three-year fixed opening fund and the JingShun ChangCheng Value Discovery fund collectively raised over 1 billion RMB during their initial offeringsThis performance stands out, especially considering the current trend of a decrease in new fund issuance overall.

Industry insiders attribute the popularity of floating-rate funds amidst a volatile market environment to the advantages provided by these products and the star fund managers leading themMany fund managers believe that the market, after a prolonged adjustment period, has now entered a well-defined value range, making floating-rate funds an attractive option for investors looking to hedge against market uncertainties.

The recent floating-rate products that are entering the market are closely tied to the time investors hold on to their investments, fund performance, and fund size

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On November 8, the floating-rate fund BoShi HuiZe announced that its public sale will run from November 16 to November 30, under the management of fund manager Chen WeiMeanwhile, the DaCheng ZhiXin return fund has been designed such that its management fee is performance-linked, consisting of a base management fee and a performance-related reward.

Specifically, the base management fee for the DaCheng fund is waived during its open period, while it charges a 1.0% annualized base management fee during the closed period based on the fund's net asset value from the previous dayDuring the closed period, half of this fee goes to the fund's manager as a committed management fee, and the other half is contingent upon the fund's annualized returns during the closed periodIf the fund's annualized rate of return exceeds 8% and surpasses the applicable performance benchmark, the fund manager is entitled to a performance reward calculated at a rate of 20% on the returns exceeding the benchmark.

Throughout 2023, the regulatory bodies have repeatedly urged the public fund sector to expedite the issuance of equity products and to implement fee reform

Floating-rate funds serve as a crucial innovation within this reform frameworkOn August 25, a collective approval for twenty floating-rate funds was granted, stirring considerable interest in the market.

Apart from the two existing funds, numerous floating-rate funds are either in the process of being launched or are officially announced for sale in the near futureAmong them are exciting products tied to performance, such as the FuGuo YuanJian selected three-year fixed opening fund, the HuiTianFu Active Selected three-year fixed opening fund, and the NanFang QianZhan GongYing three-year fixed opening fund, which opened at the end of September and early October, respectivelyFurthermore, floating-rate funds tied to the time of holding such as the ZhongOu ShiDai GongYing and the HuaXia RuiYi have begun selling recently as well.

In the interim, several new products are queued for issuance, including the FuGuo Core Advantage Mix and the YingHua HuiXiang three-year fixed opening fund, which will selectively launch between November 9 and November 16. Others like the JiaShi Innovation Power and HuaAn YuanJian HuiXuan are still finalizing their release dates

This continual flow of floating-rate fund offerings suggests a robust response from fund companies aiming to introduce more innovative products to the market.

The initial two floating-rate funds' issuance results have been commendable thus farOn October 31, the JingShun ChangCheng Value fund formally took effect, achieving a remarkable initial fundraising scale of 1.301 billion RMB with over 16,127 valid subscriptionsThis fund is recognized as the first floating-rate fund linked to holding duration, allowing longer holders to benefit from progressively reduced management fees.

This fund is managed by the renowned value investor Bao WuKe, who oversees eight funds with a total managed asset exceeding 20 billion RMBNotably, this year's performance has been stellar, with six of his funds returning over 10% year-to-dateBao WuKe attributes the fund's higher positioning to the observed value opportunities in certain stocks, providing a tactical approach to positioning amidst a global market downturn.

Previously, on October 27, a related fund by Jiaoyin Schroder announced a fundraising total of 1.668 billion RMB for its RuiYuan three-year fixed opening fund, with effective subscriptions recorded at 27,043 accounts

This fund has similarly linked its management fees to performance, indicating a significant push towards innovative fund management in navigating current economic challenges.

Overall, while the broader new fund issuance landscape may look bleak, floating-rate funds are flourishingReports indicate that the average issuance volume of new funds in the last three months is under 900 million units, highlighting the distinctive success of these floating-rate offerings against the market's backdrop.

Experts in the field suggest that the successful launch of floating-rate funds in this turbid environment signals a restoration of market confidenceIt showcases investors’ consensus on the benefits of positioning in a potentially undervalued marketThe strategic decisions of prominent fund managers in this round of new issuances further underscore investor interest.

The caliber of fund managers spearheading the current wave of floating-rate funds has been notably impressive, with leading names from various firms

For example, the China Merchants Fund is represented by Hou Jie, while Xingsheng Global Fund tapped He YiGuangMeanwhile, leading firms like Huaxia Fund and JingShun ChangCheng have representatives with impressive track recordsThis seems to reflect a concerted effort across the industry to optimize performance strategies within emerging market conditions.

In conclusion, as the floating-rate fund sector continues to unfold, the implications for the broader investment landscape remain positiveNot only is this a signal for potential recovery in investor sentiment, but it also highlights the adaptability and innovation among fund management entities striving to cater to rapidly evolving market demands.

As we observe the trends unfold, the future of floating-rate products and overall market innovations holds promise in shaping strategies for investors aiming to navigate the intricacies of the financial markets.