The fund industry is undergoing a major compensation reform. Under new guidelines from the Asset Management Association of China (AMAC), fund managers whose products underperform their benchmarks by over 10 percentage points with negative fund profits in the past three years will face a mandatory pay cut of at least 30%. Additionally, firms must now evaluate multi-fund managers based on weighted performance metrics, including fund size and tenure, while excluding funds managed for less than a year.
Against this backdrop, GF Fund Manager Zheng Chengran’s portfolio has drawn market scrutiny. Wind data shows that, as of December 8, Zheng manages eight funds with a total AUM of RMB 13.877 billion.
Among them, GF Carbon Neutrality Theme A has delivered the strongest performance since Zheng took over in June 2024, with a return of over 76%. However, focusing on the more comparable three-year track record reveals stark divergence against benchmarks:
- GF New Energy Selection A outperformed its benchmark by 17.99%, standing as the sole winner. - GF High-End Manufacturing A lagged by 81.71%, the worst performer. - GF Growth New Momentum A trailed by 45.56%. - GF Xingcheng A, GF Chengxiang A, and GF Growth Power Three-Year Holding A underperformed by 58% to 61%.
Excluding funds with less than three years under management, the performance gap between Zheng’s best and worst funds reached 99.7 percentage points.
Notably, size and performance show a clear mismatch. GF High-End Manufacturing A, despite being the largest fund at RMB 5.272 billion, has seen its assets shrink by RMB 12.973 billion over three years. Meanwhile, the only outperformer, GF New Energy Selection A, holds just RMB 1.448 billion. This imbalance will magnify the impact of the new rules.
Looking ahead, the reforms fundamentally reshape incentive structures—shifting focus from star-product highlights to weighted overall performance, and from pooled compensation to precise, fund-level accountability. This imposes strict discipline on managers juggling multiple underperforming funds and forces firms to rethink product strategies and resource allocation.
