Goodbye, 80 Billion Fund Manager

Ma Long has stepped down, marking the end of a "legend" in bond investment.

On April 1st, China Merchants Fund officially announced that Ma Long has resigned as the fund manager of China Merchants Anxin Yield Bond. After this resignation, Ma Long no longer holds the position of fund manager.

Ma Long is one of the well-known bond fund managers in the industry and a representative figure in credit bond investment. Throughout his career, he has managed bond funds exceeding 87 billion, making him one of the top investment managers in terms of entrusted scale and long-term stable performance.

The relevant announcement indicated that the reason for Ma Long's departure was "other assignments."

According to reports, this change is an adjustment made by China Merchants Fund based on the overall planning of the investment research team, resource optimization, and product management needs. After stepping down as the manager of China Merchants Industrial Bonds and China Merchants Anxin Yield Fund due to work arrangements, Ma Long still serves as the Chief Fixed Income Investment Officer at China Merchants Fund.

Ma Long's "Entry"

Ma Long, who shares a name with a famous athlete, has his own unique career trajectory in the public fund industry.

Ma Long holds a Ph.D. in Economics from Nankai University and joined Tianhong Asset Management in July 2009, thus entering the field of securities investment research.

His early resume shows that Ma Long engaged in various research work on macroeconomics, bond market strategies, and stock market strategies at Tianhong, covering a wide range of research areas. In the future, his broad macro perspective and good individual bond selection ability are likely to benefit from this.

There is also a background to Ma Long's joining; in 2009, China had just experienced significant macro fluctuations, and companies were hiring a large number of macro talents. This made Ma Long's Ph.D. in Economics particularly valuable. Had he joined a few years earlier or later, he might not have had such a good opportunity.

After three years at Tianhong, Ma Long moved to China Merchants Fund, opening another door to a more brilliant path in fixed income investment research.

China Merchants Fund, backed by China Merchants Bank, has always been a "big player" in fixed income, historically producing a wealth of talent in fixed income investment. Ma Long, who joined "midway," would write his own story at China Merchants Fund.

Platform "Iteration"

The period around Ma Long's joining China Merchants Fund coincided with a time of significant development for the company.

As the first joint venture fund company in the industry, China Merchants Fund holds a very unique position in China's public fund sector.

It has issued the industry's first umbrella fund, the China Merchants Antai series, had the industry's first foreign investment director, and raised one of the first batch of money market funds in China, the China Merchants Cash Appreciation Fund.

From 2003 to 2008, China Merchants Fund made considerable progress in equity investment, obtaining qualifications for managing the National Social Security Fund, corporate annuity fund investment management, Qualified Domestic Institutional Investor (QDII) qualifications, and specific client asset management qualifications, becoming one of the few fully licensed public fund institutions.

At the same time, the company also underwent two equity changes in 2006 and 2013, becoming a fund company wholly controlled by China Merchants Bank In the future, within the vast customer base of the latter, the fixed income products of China Merchants Fund will continue to thrive.

Malong's joining coincided with this interesting moment.

Quietly "Debuting"

In the first two years after joining China Merchants Fund, Malong served as a researcher in the Fixed Income Investment Department. According to the information, he was engaged in "macroeconomic and bond market strategy research" at that time.

In March 2014, Malong finally got the opportunity to showcase his skills.

He became the co-fund manager of the "mini" fund China Merchants Anxin Yield Bond C, which at that time had a scale of less than 200 million.

He managed it alongside a seasoned investment talent named Sun Haibo, who had previously worked in proprietary trading at Everbright Securities in the last century.

After Malong took over, the yield of China Merchants Anxin Yield Bond C became more stable, and its scale began to grow continuously, now reaching over 4 billion.

From 2014 to 2015, Malong gradually took over the management responsibilities of several fixed income funds.

Some funds, like China Merchants 1 Month Wealth Management A, were only managed for a little over a year.

Others, like the China Merchants Industrial Bond Fund, later became his flagship product, with its scale reaching over 20 billion.

Drawdown Control "Big Shot"

The timing of Malong's appointment as fund manager once again showcased his remarkable luck, much like his entry into the industry.

Starting in November 2014, a major bull market emerged in the Chinese bond market. From November 2014 to October 2015, the central bank cut interest rates six times and lowered the reserve requirement ratio five times, releasing a large amount of liquidity into the market.

After 2016, with the launch of "supply-side reform," there was another wave of investment flowing into the bond market, driving another round of strong sales of bond market products.

However, during this bull market in bonds, Malong's personal style was also vividly displayed.

Taking the China Merchants Industrial Bond (shown below) and China Merchants Anxin C as examples, after Malong took over, the overall drawdown and volatility significantly decreased, and the net value curve gradually formed a continuously upward "fishing line" shape.

These products, later praised as "line-drawing style," were favored by channels, and Malong can be considered one of the early fund managers in the industry to recognize the significance of controlling drawdowns.

Additionally, on an annual basis, the Anxin Yield C fund managed by Malong achieved "positive returns every year" during his tenure, including years when the performance benchmark showed negative returns.

There is a lot of external discussion about the portfolio style

As a fixed income fund manager, Ma Long's investment style is far less familiar than his net value style.

There are many summaries about him in the industry, but due to the unique "decision barriers" of fixed income investment, various conclusions are inconsistent.

From his several representative product portfolios, he has the following notable holding characteristics:

1. Good at credit bond investment, with outstanding timing ability and strong investment mobility. He held a large amount of short-term coal and steel bonds in his early years, switched to urban investment after 2018, and then returned to coal industry bonds in 2021 while continuously extending the duration, all of which yielded excess returns.

2. Relatively good at grasping investment opportunities in new varieties, with independent thinking ability.

3. Dares to take heavy positions, can fight and withdraw, likes to maintain a certain level of leverage, and is not too fond of low-risk interest rate bonds.

4. Some products have periodic allocations of equity varieties, but the investment style is quite erratic, and the drawdown control is excellent. There is much external discussion about this, but it is difficult to reach a consensus on praise or criticism.

Overall, Ma Long is considered a good hand in the industry for "fixed income +", but his style is different from the fixed income + talents who are usually good at equity investment.

Latest Views

With Ma Long stepping down as the fund manager of Anxin Yield Bond, the annual report of this fund is likely to become his latest public market view.

Ma Long believes that considering the current macroeconomic situation is in a marginal recovery period, the fourth quarter monetary policy report also mentioned that while implementing a moderately loose monetary policy, it is necessary to adjust and optimize the policy intensity and rhythm at the right time. He expects that the central bank will maintain a neutral and tight funding environment for a period of time.

He also expects that the probability of interest rate cuts and reserve requirement ratio reductions in the short term is decreasing, which will restrict the leverage space of non-bank institutions, thereby increasing pressure on the interest rate market. Additionally, with the incremental policies taking effect in 2025 and the new government bond supply, there will also be disturbances to interest rates.

Continuous attention should be paid to the central bank's control over the funding environment and the effectiveness of incremental policies, Ma Long concluded.

Risk Warning and Disclaimer

The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at one's own risk