Fund style drift remains unabated; demands for scale and performance rankings are the main reasons.

Recently, C Fund Company received a regulatory fine, which has once again brought the issue of fund style drift back into investors' view. Since the beginning of this year, regulatory constraints on the investment side of public funds have continued to intensify, with guidelines on performance benchmarks and thematic investment styles being introduced in succession. However, fund style drift remains rampant. Particularly in the second quarter, under the siphoning effect of the tech market, some consumer and dividend-themed funds, as well as balanced and value-style funds, have shifted towards popular sectors like semiconductors and optical communications, resulting in a noticeable deviation between actual holdings and product positioning. Several institutions interviewed by Securities Times reporters indicated that a combination of factors, including scale demands, relative ranking assessment orientations, and the relatively broad contractual boundaries of some products, are significant reasons why fund style drift is difficult to eradicate. Regarding the phenomenon of some funds drifting to attain short-term high returns, the interviewed institutions generally believe that short-term gains cannot justify deviations from product positioning. Reducing style drift still requires forming a full-process constraint from assessment mechanisms, product design, sales evaluations, and ongoing supervision.