Chen Feng is in charge of a total of 27 billion yuan in Bosera stock funds, but he's nothing special according to his colleagues. Chen is not a garrulous man but he is really good at guessing riddles.
As China's largest fund company, Bosera Fund's office building looks quite fantastic from the outside. But the fund managers' offices inside are very simple and no different from those of any other companies.
On Chen Feng's desk is a white and black photo of George Soros clipped from a newspaper. Chen smiled and said that his predecessor left it behind.
For his old schoolmates, Chen Feng's life is rather bland. Most of his schoolmates have their own small businesses. They often get together but Chen Feng is committed to sit and discuss China's economic fluctuations everyday with his peers. This kind of life seems dreary to his old buddies.
Compared with the national capital market with a total asset value of 30,000 billion yuan, his 27 billion yuan "is just like a drop of water in the sea. It's nothing to boast about," Chen Feng remarked.
But by talking with Chen, we found that 2007 has had a profound impact on fund managers. Each of them has undergone complicated external alterations and even more subtle internal mental changes.
March: crazy expansion of the total fund
A colleague of Chen Feng who works in the same department admitted that they now have an advantage: they don't have to sell funds by themselves. This is quite different from previous years. He added: "Previously when we planned to hold a meeting to encourage ordinary people to buy funds, only about twenty people would attend."
Now we reserve a meeting room with 800 seats, and more than 2,000 people may end up attending it, and all have expectations. Bosera holds 1,000 lectures or "fund lessons" across the country annually, aiming at accommodating ordinary investors with basic fund knowledge. Chen Feng still remembers selling funds and giving lectures in Hunan several years ago, adding that, "We sold 8 million funds in a little over a month." Some one even remarked, "Why not sell funds at supermarkets?"
He gave lectures in many places. When lecturing in Beijing, many people in the audience were old men holding their grandsons; these grandparents knew virtually nothing about funds. They asked very basic questions: what exactly is a fund? Which is better, a one yuan fund or a three yuan fund? What they cared about the most was how much profit they could earn from buying funds.
Chen Feng's guiding principle is to make listeners understand that funds are also a kind of investment. Risks are an essential part of investment and fund investments also take risks. But many Chinese have become familiar with basic investment knowledge starting in 2007. Total fund assets have been expanding at an astounding speed. Bosera's selection of stock funds has evolved into an enormous fund worth tens of billion of yuan from its initial several billion yuan.
Fund sales agencies also changed their style. Previously fund companies had to find local sales agencies and entrusted them to sell their funds. But today a U-turn has been made. Sales agencies now offer to help sell Bosera funds. "This year funds sold quite well. They must have earned a great deal of money," one of the Bosera employees remarked.
Chen Feng felt that the Chinese enthusiasm for investments has definitely been aroused. This is a fast growing year for fund investments. All of his high schoolmates telephoned him and inquired where they should put their money.
As the total fund managed has expanded, Chen Feng has also changed his vision, especially his interactions with foreign fund companies. Several years ago, one president of a Taiwan company asserted that his company was managing a total fund worth over 100 billion yuan. "At that time we thought this was an amount that we would never be able to reach." But the vigorous investment enthusiasm on the mainland this year has pushed Bosera's total fund assets to a new high, over 250 billion yuan.
Days ago an American came to China and said he wanted to invest an undisclosed sum of money in the Chinese financial market. "Initially, we were quite interested. Several fund managers together went to pitch their respective funds. After a long conversation they found out that he had a total investment of 100 million dollars but he only planned to put 2 percent of it in the Chinese market. Upon learning this, the assembled fund managers pitching their funds stared at each other, unable to speak a word," Chen Feng noted. Today a few tens of millions to invest is simply too paltry a sum for Chinese fund managers.
During April 2007, Chen Feng's total fund managed rose sharply. After the share prices collapsed on May 30, people's interest in purchasing funds got further stirred up. Starting from September, according to the stock index, the blue chip stocks have strengthened, prompting a rush to buy funds over a short period of time.
In November Chen Feng ceased selling Bosera's selection stock funds for a while to "prevent blind investments". Chen explained that he feels responsible for those grandfathers who came to listen to his lectures with their grandsons. "We must tell them fund investments have risks. You can only join in the fund investment army only if you have adequate risk resistance capacity."
August: Rashomon at the capital market
Before Chen Feng decides to buy a stock, he meets with many experts and scholars and makes many detailed analyses. But what he values most is a spot investigation inside a related listed company.
Years ago the supervision over listed companies was not quite adequate. Chen Feng came to Gansu to investigate a listed company producing starch and he found that all the machines had ceased production. The managers there told him it was a workers' rest day. After he returned, Chen learned that they had not yet started their production. Later they sold all the machines.
In order to determine whether to buy the stock of a coal mining enterprise, Chen Feng investigated the mine. According to the data provided by analysts, this mine would soon expand its production in order to meet the ever-increasing demand for coal in recent years. "My personal observation of the mine indicated that it was impossible to expand coal production in such a short period. Therefore I refuted the original analysis report."
Considering their own interests, some senior managers of listed companies may intentionally lie to fund managers, so it is vital to conduct an investigation in person.
Chen Feng believed that many things on the capital market resemble "Rashomon". Everyone has his own way of describing things and his own explanations, but no one can easily make a judgment. Even the wisest research analysts may make mistakes.
Chen always tells himself to try to be impartial. As an enormous fund company with a total of over 60 stocks, "We must not hold any prejudice against any industry." Yet Chen himself had a bias against the petrochemical industry. "I felt that its stock prices were unlikely to rise. But later my research analysts persuaded me by their facts. One petrochemical enterprise's stock prices rose 1 yuan in a short time," said Chen.
November: great pressure
As a stock fund manager, Chen Feng has to face the rapidly changing stock market.
It is an accepted fact that fund managers don't sleep well because "they are worrying about returns all the time." According to his colleagues, Chen Feng has the least stress. "He is extremely quick in making decisions whether to buy or sell."
However, in November as several macroeconomic policies, such as tight monetary policies and mortgage policies, came forward in succession, Chen Feng also felt great mental stress.
"Once a new policy is introduced, you have to make a judgment within a few days. When the policy comes out, you have to make a primary judgment on the following day." Chen Feng usually likes to play chess on the computer so as to ease the strain. "But at that time it was useless for me to play chess," Chen noted. When the mortgage policy came out, fund managers had to communicate with all the industry analysts one by one. "We had to discuss policy with the high level managers in listed real estate companies as well as bank credit personnel round the clock. We had no time to sleep."
When a major trend is identified, fund managers have to keep a close eye on the changes during the following days. One essential quality of a fund manager is to be brave enough to confront all changes. "You may have just formed a seemingly perfect analysis framework. A small change may tilt it all over. You have to readjust your analysis framework. So you may feel very tired." That is why Chen Feng prefers to read history books. The reason is quite simple: "things in history books do not change."
Actually Chen doesn't long for a quiet world. "I once read a book which analyzes people's desires: some people love money; some love fame; some love to do research. I'm personally fond of research. If I can clearly analyze China's economy and establish my own analysis framework, it would give me a sense of achievement."
His love for research may place him at the top of the list of the 10 best Chinese fund managers this year. "Actually I don't earn much money, only about one million yuan a year," Chen Feng remarked. He thinks he is only an ordinary white-collar worker who has not even fully paid back his mortgage yet.
(China.org.cn by Zhang Ming'ai, December 27, 2007)
