New developments have emerged regarding the implementation of performance benchmark rules for China's 38 trillion yuan mutual fund market. Recent reports indicate that fund companies across various regions have received notifications requiring them to carefully manage adjustments to existing public fund benchmarks during the transition period of the "Guidelines for Publicly Offered Securities Investment Fund Performance Benchmarks." The approach follows principles of thorough pre-assessment, steady implementation, and comprehensive post-monitoring, with specific timelines established for upcoming work.

Industry experts emphasize that performance benchmarks serve as crucial anchors and measuring tools for fund investments. Strengthening their regulatory role, standardizing selection processes, and improving internal controls and compliance management will help restore proper function to fund performance benchmarks. This realignment of investment anchors aims to reshape industry practices and effectively protect investor rights.

Benchmark selection requires careful consideration, with adjustments made only when necessary. Fund managers must conduct correlation analyses between benchmarks and actual holdings over the past two years, assess long-term applicability, and evaluate alignment with investment strategies outlined in fund contracts. The notification specifically emphasizes avoiding unnecessary adjustments that might disrupt investor expectations.

Several restrictions apply to prevent lowering assessment standards. Open-end funds adjusting equity or bond indices may include current deposit rates to represent cash allocations, with weight limits of 10% for equity funds and 5% for mixed and bond funds. Equity index weights should reflect the central tendency of equity asset weights over the past two years (three years for flexible mixed funds). Conversions from bond wealth indices to full-price/net-price indices are prohibited, as are adjustments from total return equity indices to price indices.

Specific requirements apply to equity and mixed funds. Equity fund benchmarks must maintain over 80% weight in equity assets, with absolute return benchmarks generally prohibited except for specific products like hedge strategies or performance-based fee funds. Mixed funds must demonstrate allocation between equity and debt assets, with minimum weights of 10% for equities and 5% for bonds. Funds including Hong Kong stocks in their investment scope should incorporate corresponding benchmark elements, while broad market stock selection funds should primarily use broad-based indices.

The transition will proceed in batches, with the industry divided into four phases approximately two months apart—targeting late April, mid-June, mid-August, and mid-October. Companies adjusting over 100 funds should spread changes across 3-4 batches, while those with fewer than 20 funds may complete adjustments in one batch. Each batch should include different product types, and portfolio adjustments should precede benchmark changes to avoid market disruption.