If it refers to a reverse fund that tracks an index, it will take several months from the time when the company reports the product information to the time when it is approved for re-issuance, because it cannot go through simple approval.
Second, the core tip: because reverse funds can only be short, and the market is always long and short. So once the market rises unilaterally, or the big bull market comes, the reverse fund is likely to suffer heavy losses. As an immature domestic investor, it is difficult to accurately grasp the volatile market of frequent long-short swaps, so it is inevitable that investors will step on the wrong beat when purchasing reverse funds, and investors will easily suffer losses.
In its official Weibo, the CSRC responded to the question "When to launch the reverse fund" raised by netizens. The CSRC said that it has issued feedback on relevant products, requiring fund management companies to further demonstrate in strengthening risk control, protecting the legitimate rights and interests of investors, and implementing the appropriateness of investors. After the above work is completed, the registration of reverse funds will be accelerated.
The reason why some netizens asked when the reverse fund was launched was mainly based on the fact that in March this year, the CSRC allowed fund companies to declare reverse fund products. Subsequently, three fund companies submitted application materials for five reverse fund products to the CSRC. Among them, Hui Tianfu submitted the application materials of two reverse fund products, namely, the Shanghai and Shenzhen 300 reverse 1 times leveraged ETF (transactional open index fund) and the Shanghai and Shenzhen 300 reverse double leveraged ETF; The other three in the queue are E Fund Shanghai and Shenzhen 300 Index Futures Reverse ETF and E Fund Shanghai and Shenzhen 300 Index Futures Reverse Double Leveraged ETF; Shen Wanling believes that the Shanghai and Shenzhen 300 index futures reverse double leverage index launch fund. Now eight months have passed, but these five reverse funds are all in the "first feedback" stage, and none of them have been approved for issuance.
It is obviously necessary for the CSRC to be cautious about the launch of reverse funds. As the CSRC said when it answered the question of "when to launch the reverse fund", "the operating mechanism of the reverse fund is complicated, and I will study this kind of product carefully in the early stage". So, why is the operation mechanism of reverse fund relatively complicated? Perhaps here, investors should first understand what a reverse fund is.
Reverse funds, nominally funds that move against the market, are actually short-selling funds. Reverse capital is relative to forward capital. The design principle of reverse fund is to use financial derivatives such as stock index futures and options, to use short selling of stocks, and to exchange shares with the underlying index. In an attempt to gain something in the process of market decline. In order to achieve investment purposes, such funds usually use quantitative investment to determine the position, type and variety of investment. In concrete operation, the fund manager is almost unaffected by the running trend of the underlying index and the current price of the underlying securities, and adopts the investment strategy of "passive investment".
Reverse fund is actually a structured financial product. An index fund can be divided into two sub-stocks, one can be "bullish" and the other can be "bearish". This long-short product takes the form of graded fund. In the same portfolio, refer to different quantitative models to calculate the agreed risk-return ratio of different fund share categories, forming two or more different shares. And its "lever" can be divided into "forward" and "reverse", just like a seesaw. When one side's net worth increases, the other side's net worth will decrease accordingly; For trend investors, the key to profit from investment lies in whether investors can see the main direction of future market operation. Simply put, investors can buy "positive funds" when they see more markets; When you are bearish on the market outlook, you can choose the "reverse fund". In other words, the reverse fund is a tool for investors to short.
It is precisely because of this that the introduction of reverse funds is of positive significance. It not only enriches the variety of funds, but also better meets the needs of investors with different investment styles. More importantly, it can cultivate investors' short-selling awareness, change investors' investment concept of "dead bulls", and also allow investors to gain profits when the stock market falls. Especially in China stock market, where the bull is short and the bear is long, the "reverse fund" should be of great use.
However, because the reverse fund is a structured financial product, it should be used as a portfolio together with the forward fund. Investors need to constantly adjust the proportion of their investment in reverse funds and forward funds, or just invest in reverse funds in stages. After all, when the reverse fund exists as an independent fund product, its existence is fatal.
Because reverse funds can only be short, and the market is always long and short. So once the market rises unilaterally, or the big bull market comes, the reverse fund is likely to suffer heavy losses. As an immature domestic investor, it is difficult to accurately grasp the volatile market of frequent long-short swaps, so investors will inevitably step on the wrong beat when buying reverse funds, which will easily lead to losses. Moreover, investors who subscribe for funds usually adopt a long-term holding strategy, while reverse funds are more suitable for band operation. Once there is a big rise and a small return, or even a unilateral rise, if investors hold reverse funds for a long time, they will not only enjoy the benefits of the bull market, but will suffer greater losses.
Perhaps it is precisely because of the above attributes of the reverse fund, and considering the characteristics that investors in the A-share market are not mature enough, the management must be cautious about the official launch of the reverse fund.