The era of "performance-driven compensation" has arrived as China’s mutual fund industry undergoes its most significant performance evaluation reform in three years, potentially affecting nearly 1,000 fund managers with salary adjustments.
The recently proposed "Guidelines for Performance Assessment Management of Fund Companies (Draft for Comment)" has sparked industry-wide discussion, particularly its provisions restricting dividend distributions to shareholders. The guidelines mandate that fund companies must prioritize capital accumulation, research investment, risk management, technology upgrades, investor education, and social responsibility when determining dividend frequency and ratios—especially for underperforming funds with significant investor losses over three years.
Key Data Highlights: - E Fund distributed a total of ¥8.296 billion ($1.2B) in dividends to shareholders over the past decade (2015-2024), with Orient Securities (600958) receiving ¥2.94 billion ($420M) through its 35.41% stake. - The fund house maintained an average 50.68% payout ratio during this period, ranking second among top-tier peers, behind only Invesco Great Wall Fund. Payouts exceeded 60% in 2017, 2018, and 2023, peaking above 70% in 2022. - Employee ownership platform Shanghai Jingju Jin Investment received ¥2.03 billion ($290M) in dividends since 2016. Key executives benefited substantially: * CEO Zhang Hui: ¥280M ($40M) * Former Chairman Li Wen: ¥190M ($27M) * Investment Committee Chair Yuan Jianjun: ¥130M ($18.6M) * Marketing Director Lei Jiming: ¥120M ($17.1M)
Performance Contradictions: Despite these distributions, E Fund’s non-money fund ranking has fluctuated dramatically—from 7th in 2015 to 2nd in 2020 before sliding to 9th by Q3 2025 (¥655.6B AUM). Performance metrics reveal: - 63% of 214 primary funds delivered negative returns from 2022-2024 - 51% underperformed benchmarks, with 36% lagging by over 10% - Aggregate losses reached ¥100.4 billion ($14.4B) across all products
Industry observers criticize excessive payouts for: 1. Undermining capital buffers and risk resilience 2. Failing to align with long-term shareholder commitments 3. Poor investor experience during market downturns