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View on the crash of CSI500 & China regulators blamed fund for style drift

Fang submitted 2021-09-28 15:13:41
  1. View on the crash of CSI500

    The crash of CSI500 index has some relationship with the limiting electricity policy as there're many energy, chemical and raw materials stocks in CSI500 index( accounting for around 50%).
    CSI500 is still attractive in long term. Current fluctuation is caused by industy regulation. Once the constituent stocks updated, more and more professional, delicate, specific, innovative companies and the ones meeting national development policy will be included into CSI500 index.

  2. China regulators blamed funds for style drift

    Following the “window guidance” provided by the supervisory authority for the deviation of fund styles, many custodian banks have recently begun to require fund companies to self-check their “style library” or “theme library”. There are also custodian banks to check whether the top 20 major stocks of the theme fund meet the contractual agreement, and the goal is to point to the "style drift" behavior of a small number of funds. The supervisory authorities have continued to pay attention to this issue and have always put forward demands on the issue of fund style drift. The theme fund needs to strictly follow the investment scope stipulated in the fund contract and abide by the contract. It is not advisable to follow the trend and chase hot stocks outside the theme to avoid misleading investors and damaging the credibility of the industry.
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