1. The design principle of an inverse fund is to move in the opposite direction to the market. It uses derivatives such as stock index futures and options, and uses various methods such as short selling of stocks and stock index swaps to try to achieve success in the market. Make money when the market goes down. At present, there is no such product in China due to system and mechanism reasons.
If it refers to an inverse fund that tracks an index and makes profits when the index falls but loses money when it rises, since it cannot be subject to simple approval, how many more funds are needed from a company to submit product information to approval and then issuance? months time.
2. Core tip: Because reverse funds can only go short, and market conditions are always long-short swaps. Therefore, once the market rises unilaterally, or a bull market approaches, reverse funds are likely to suffer heavy losses. As domestic investors who are temporarily immature, it is difficult to accurately grasp the volatile market conditions with frequent long-short swaps. Therefore, subscribing for reverse funds will inevitably lead to wrong steps, and investors will easily suffer losses.
The China Securities Regulatory Commission responded on its official Weibo to the question of "when to launch inverse funds" raised by netizens. The China Securities Regulatory Commission stated that it has now issued feedback on relevant products, requiring fund management companies to make further demonstrations in terms of strengthening risk control, protecting the legitimate rights and interests of investors, and implementing investor suitability. After the above work is completed, the registration of inverse funds will be accelerated.
The reason why some netizens raised the question of "when will inverse funds be launched?" is mainly because in March this year, the China Securities Regulatory Commission allowed fund companies to declare inverse fund products. Subsequently, three fund companies submitted application materials for five inverse fund products to the China Securities Regulatory Commission. Among them, China Universal submitted application materials for two inverse fund products, CSI 300 Inverse 1x Leverage ETF (traded open-end index fund) and CSI 300 Inverse 2x Leverage ETF respectively; the other 3 Those waiting in line are E Fund CSI 300 Index Futures Inverse ETF, E Fund CSI 300 Index Futures Inverse Double Leverage ETF; and Shenwan Lingxin CSI 300 Index Futures Inverse 2x Leverage Index Sponsored Fund. Now eight months have passed, but these five inverse funds are all stuck in the "first feedback" stage, and none of the inverse funds has been approved for issuance.
It is obviously necessary for the China Securities Regulatory Commission to take a cautious attitude towards the launch of inverse funds. As the China Securities Regulatory Commission said in response to the question "When will the inverse fund be launched?", "The operating mechanism of the inverse fund is relatively complex, and the China Securities Regulatory Commission has conducted careful research on this type of product in the early stage." So, why is the operating mechanism of inverse funds relatively complicated? Perhaps here, investors first need to understand what an inverse fund is.
An inverse fund is nominally a fund that moves in the opposite direction to the market, but it is actually a short-selling fund. Inverse funds are relative to forward funds. The design principle of inverse funds is to use financial derivatives such as stock index futures and options, and to use short-selling stocks, stock and underlying index swaps, etc., in an attempt to still obtain income during the market decline. In order to achieve investment purposes, such funds usually use quantitative investment to determine investment positions, types and varieties. During specific operations, fund managers are almost not affected by the operating trend of the underlying index, the current price of the underlying security variety, etc., and adopt "passive investment" ” investment strategy.
An inverse fund is actually a structured financial product. An index fund is divided into two categories of sub-shares, one category can be "long" and the other can be "short". This type of long-short product takes the form of hierarchical funds. Within the same investment portfolio, two or more levels of different shares are formed through complicated calculations based on the agreed risk-return ratios of different fund share categories and with reference to different quantitative models. . Its "leverage" can be divided into two types: "forward" and "reverse". Just like a seesaw, while the net worth of one party increases, the net worth of the other party will decrease accordingly; for trend investors, investing The key to profitability is whether investors can identify the main direction of future market operation. To put it simply, investors can buy "forward funds" when they are bullish on the market; and they can choose "reverse funds" when they are bearish on the market outlook. In other words, inverse funds are a vehicle for investors to take short positions.
Because of this, the launch of inverse funds is of positive significance. It not only enriches the variety of funds and can better meet the needs of investors with different investment styles, but more importantly, it can cultivate investors' short-selling awareness, change investors' "dead long" investment philosophy, and also allow investors to Investors may also gain profits when the stock market falls. Especially in the Chinese stock market where bulls are short and bears are long, "contrary funds" should be of great use.
However, precisely because inverse funds are a structured financial product, inverse funds should be used together with forward funds as an investment portfolio. Investors need to constantly adjust their investment ratio between reverse funds and forward funds, or only invest in reverse funds periodically. After all, when inverse funds exist as an independent fund product, they have a fatal weakness.
Because inverse funds can only go short, and market conditions are always long-short swaps. Therefore, once the market rises unilaterally, or a bull market approaches, reverse funds are likely to suffer heavy losses.
As immature domestic investors, it is difficult to accurately grasp the volatile market conditions with frequent long-short swaps. Therefore, when subscribing for reverse funds, it is inevitable to go wrong, and investors will easily suffer losses. Moreover, investors who subscribe for funds usually adopt a long-term holding strategy, but inverse funds are more suitable for swing operations. Once there is a big rise, a small reversal, or even a unilateral rise in the market, if you hold the inverse fund for a long time, , investors not only cannot enjoy the gains of the bull market, but will suffer greater losses.
Perhaps based on the above-mentioned attributes of inverse funds and considering the immature characteristics of investors in the A-share market, management must be cautious about the official launch of inverse funds.