Public Offering High-Quality Development Anniversary Review: "Leading Effect" Eases, Major Shakeup in Five-Star Rating Camp

Recently, the China Securities Regulatory Commission’s “High-Quality Development Action Plan for Public Funds” marked its one-year anniversary of implementation. Under the intertwined variables of fee rate reforms, performance benchmark hardening, salary reductions, and more, the public fund industry’s investment research capabilities are undergoing a silent yet profound restructuring.

According to the latest “Q1 2026 Public Fund Company Rating Report” released by the Ji’an Jinxin Fund Evaluation Center, a total of 154 fund management institutions met the three-year rating requirement and received an overall rating in the first quarter. Among them, 73 fund companies achieved five-star ratings in various individual product management categories; in the five-year dimension, out of 142 participating institutions, 58 earned five-star ratings.

Notably, this round of five-star ratings saw a large-scale “inflow and outflow”: new entrants like Caitong Fund simultaneously advanced to five-star ratings in secondary bonds, hybrid, and closed-end categories, while veteran firms such as Guoquan Fund, Xingzheng Global Fund, and China Europe Fund quietly exited the three-year hybrid rating.

What industry ecological changes are reflected by this “five-star reshuffle” covering fixed income and equities, involving both leading and small-to-medium institutions?

Structural adjustments within the five-star camp: fixed income transforms, equity differentiation

Ji’an Jinxin’s evaluation system subdivides fund management ability into ten categories: money market, pure bond, primary bond, secondary bond, hybrid, stock, closed-end, index, QDII, and FOF, based on dimensions such as profitability, risk resistance, performance stability, stock selection and timing ability, and benchmark tracking. From the Q1 2026 rating results, there are 73 five-star firms in the three-year dimension, but the “inflow” and “outflow” lists show unusually intense changes.

Fixed income products have become the “eye of the storm” in this rating fluctuation. In the three-year pure bond rating, institutions like China New National Certificate Fund, Tianzhi Fund, Xinghua Fund, and Zhongtai Securities (Shanghai) Asset Management newly achieved five-star ratings, while Guohai Franklin Fund, Pengyang Fund, Qianhai United, and Changsheng Fund exited the five-star camp. In primary bonds, Everbright Prudence Fund and Penghua Fund moved in together, while Tianhong Fund was singled out for removal. The competition in secondary bonds was even fiercer, with Caitong Fund, Hive Fund, Huatai Bao Xing Fund, and Penghua Fund collectively advancing, while Hang Seng Qianhai Fund, Minsheng Plus Silver Fund, and Yingda Fund regrettably left.

The rating landscape for equity products is similarly turbulent. In the three-year hybrid rating, six institutions including Baoying Fund, Caitong Fund, and Orient Fund newly achieved five-star ratings, but the list of those dropping out includes well-known firms like Dacheng Fund, Guoquan Fund, Invesco Great Wall Fund, Xingzheng Global Fund, and China Europe Fund. In the stock category, China Life Security Fund advanced to five stars, while Golden Eagle Fund was removed. For index funds, Boshi Fund, GF Fund, and Agricultural Bank of China’s Hui Li Fund newly achieved five-star ratings, while Guolian An Fund, Huafu Fund, and Pengyang Fund exited.

The five-year dimension further confirms this “head effect” loosening and reshuffling trend. Caitong Fund simultaneously moved into five-star ratings in secondary bonds and hybrid categories; Boshi Fund and Huaxia Fund advanced in the index category, while Harvest Fund and E Fund both dropped out.

Behind the reshuffle: from “scale narrative” to “capability narrative”

The dramatic changes in five-star ratings reveal different logical threads on the fixed income and equity sides.

In fixed income, new entrants mainly rely on a dual drive of “profitability + performance stability” to break through. Data from Ji’an Jinxin shows that in the three-year pure bond five-star camp, institutions like Bohai Hui Jin and Chunhou Fund entered five stars, while top-tier platforms like GF Fund, Huaxia Fund, and E Fund temporarily remained at four stars. Meanwhile, in the five-year pure bond five-star list, veteran firms such as Xingzheng Global Fund, E Fund, and GF Fund still hold positions, but the inclusion of newcomers like Orient Fund and Yuanxin Yongfeng indicates that the “top effect” in the fixed income track is loosening.

“Competition in fixed income products has entered a ‘microscope’ era,” said a related industry insider. “In the past, simply timing the interest rate cycle could produce performance; now, rating agencies demand higher pricing for credit risk, duration management, and drawdown control. Some medium-sized institutions, with shorter decision chains and thorough risk control, are gaining relative advantages in performance stability.”

The reshuffle in equities is even more brutal. In the three-year hybrid rating, long-standing “active management benchmarks” like Guoquan Fund, Guoquan Fund, and China Europe Fund were collectively removed from five stars, attracting market attention. Ji’an Jinxin’s evaluation system shows that, besides profitability and risk resistance, stock timing and stock selection abilities are also key, with additional focus on deviations from performance benchmarks.

“Looking solely at the list changes, it’s hard to attribute them simply to market bull-bear shifts; this is more like a capability reordering based on granular investment research,” said a fund research analyst at a securities firm. “Under the high-quality development requirements, the constraint of performance benchmarks has significantly increased. Past strategies of style drift for excess returns are now blocked; if market style diverges from product contracts, the benchmark deviation in the rating system will be penalized.”

It is also noteworthy that some small and medium institutions have achieved “counterattacks” in equities. Morgan Stanley Fund jumped from a one-star to five stars in the three-year hybrid rating, becoming the most extreme case of this round of ratings change; Dongxing Fund, Guojin Fund, and Kaisi Fund also secured spots in the five-star camp for three-year hybrid products.

“This precisely shows that under the high-quality development assessment framework, size is no longer a shield,” said the aforementioned fund research analyst. “Fund ratings are based on cross-sectional comparisons within categories. Large firms manage many products across various types; if the average performance of a certain category is dragged down by a few, the overall rating drops. Conversely, smaller, ‘boutique’ institutions that maintain stable profitability and risk control in specific categories can earn five-star recognition.”

Industry restructuring: rating ecology reconfiguration and high-quality development in sync

At the one-year anniversary of the “High-Quality Development Action Plan for Public Funds,” this large-scale reshuffle of five-star ratings is seen as a microcosm of the industry’s shift from “scale-driven” to “capability-driven” development.

Ji’an Jinxin data shows that, as of the end of Q1 2026, among 154 institutions participating in the three-year rating, only 73 achieved five stars; among 142 institutions in the five-year rating, only 58 earned five stars. This indicates that even within the 37 trillion yuan public fund market, institutions capable of maintaining top-tier management in specific categories remain few.

“The scarcity of five-star ratings underscores their professional value,” said the aforementioned fund research analyst. “Against the backdrop of fee rate reforms squeezing industry profits and salary cuts impacting research stability, fund companies must answer: in which asset classes do they possess irreplaceable research capabilities? In the future, investors will increasingly focus on star labels in specific categories rather than just overall size or reputation.”

“Rating results are not the end but a coordinate system for industry capability building,” said the relevant person. “For institutions dropped from five stars, it’s a warning: they need to adjust their research processes, risk control mechanisms, or benchmark management in certain product categories. For those newly awarded five stars, it’s a professional endorsement that helps them better match targeted client groups at distribution channels.”

On the anniversary of high-quality development, the “capability map” formed by 73 three-year five-star and 58 five-year five-star institutions is becoming a window into the true investment research strength of the public fund industry.

Many industry insiders believe that as fee reductions compress the industry’s “scale dividends” and benchmark hardening erodes “style drift” space, each reshuffle of the five-star ratings is pushing fund companies back to their roots: creating sustained, stable, and explainable risk-adjusted returns in specific asset classes for investors. This may well be the most noteworthy change in the public fund industry one year after the implementation of high-quality development.