Reinforcements have arrived! New QD quota approved.
《Major Positive! The Quota Has Just Arrived》On March 27th, funds reported the approval of a new batch of QD quotas.
This is the first time new quotas have been approved after a 9-month hiatus. For the previous approval, see here《Major Positive! Quotas Are Here!》. I also noticed that this time, the quotas approved for various institutions, especially fund companies, are higher than the last batch. This time, $60 million is basically the standard, while previously the maximum was around $50 million.
This time, as with the last time, those that received a lot of approvals are, for example, those with foreign capital backgrounds like Morgan Stanley Huaxin Fund and Invesco Great Wall. They already have many QD products, and coupled with their foreign shareholder background, it's natural for them to receive larger quotas.
Apart from these, some medium-sized fund companies also received relatively large quotas this time, such as China Merchants Credit Trust, Anxin Fund, and Wanjia Fund, all receiving the maximum quota of $80 million. Among these, China Merchants Credit Trust, due to its product 'China Merchants Credit Trust Global Healthcare & Biotech,' has indeed consumed a significant amount of QD quota over the past year, so it's reasonable for it to receive more this time. However, I recall that Anxin and Wanjia don't have particularly representative QD products.
On the other hand, among the large fund companies that also perform well in QD products, such as ICBC Credit Suisse, Guohai Franklin, Southern Fund, and Penghua Fund, each only received $60 million. ICBC Credit Suisse didn't receive a large QD quota last time either.
The overall QD quota approved this time is larger than the last batch, and there's also an important macro background: the Chinese yuan is currently in an appreciation cycle. Approving more QD quotas will not put depreciation pressure on the yuan.
It is expected that starting next week, more and more QD products will gradually increase their limits. However, overall, the long-term trend of tightening QD limits is unlikely to change significantly. Recently, overseas markets have also seen simultaneous declines in stocks and bonds due to the Middle East conflict, providing everyone with an opportunity to continue bottom-fishing.
However, attention should also be paid to some previously high-premium QD ETFs in the market, as their premiums may start to be squeezed next week.
(Not for investment purposes)
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