CSI ICBC Wealth Fund Index, jointly compiled by ICBC and China Securities Index Co., Ltd. were officially launched on July 12, 2017 in Beijing. As the first customized fund index in China for bank wealth management, the index aims to leverage ICBC’s expertise in the fund sector, providing individual investors a simple, useful asset allocation template to cut information asymmetry in fund selection for fund investors.

According to an ICBC official, the first CSI ICBC Wealth Fund Index comprises CSI ICBC Wealth Equity Hybrid Fund Index (code: 930994) and CSI ICBC Wealth Dynamic Allocation Fund Index (code: 930995). The former seeks relative returns, featuring selection of funds with aims to select the most sought-after equity hybrid funds at each stage. It fits clients with some investment experience or who reinvest monthly fixed income balances in batches. The second index pursues absolute returns, and reflects the selection of both timing and funds when compiled, fitting clients who invest a fixed amount of money and hold for a long term.

Based on historical data, from early 2013 to the end of June 2017, the CSI ICBC Wealth Equity Hybrid Fund Index rose 122.07%, beating CSI 300’s growth of 76.74% over the same period, and ranked 25.76% among the comparable 458 funds in the same period, delivering a good performance. Moreover, the CSI ICBC Wealth Dynamic Allocation Fund Index grew steadily by 59.36%, with an annualized return of 11.37%, annualized volatility of 7.17%, and a Sharpe ratio of 1.59.

The total size of China’s publicly-offered fund market had exceeded RMB 10 trillion by the end of June 2017, with the number of funds surpassing 4,300. The difficulty in choice-making has become the most direct problem for fund investors. Yet, most fund indices now only add but never remove sample funds unless a certain fund is delisted, making sample adjustment of indices meaningless. However, for CSI ICBC Wealth Fund Indices, the selection of samples, adjustment to constituents and subsequent maintenance of constituent funds are researched and analyzed by ICBC, which demonstrates the Bank’s competence in the fund sector, and saves significant research cost on fund selection for investors. Furthermore, the indices are FOF indices targeting the entire market. With the rollout of domestic publicly-offered FOF products in the future, the indices are expected to become the benchmark for the development of FOF products and the key bases for investors to compare and select different FOFs.