In a significant shift within the investment landscape, the year 2023 has witnessed multiple public mutual fund companies announcing reductions in management and custody fees associated with their Qualified Domestic Institutional Investor (QDII) productsThis development is generally viewed as an effort to alleviate the financial burden on investors while enhancing their overall experience in investment returnsIndustry insiders propose that these fee adjustments not only lower costs but also inspire a wave of innovation in product design and investment research services, driving the industry towards higher-quality development.

On February 11, 2023, the Jiao Yin Schroder Fund made headlines by publicly declaring its decision to lower the management and custody fees on select fundsThis adjustment, dictated by applicable legal statutes and contractual agreements, specifically affected two of its prominent QDII products—the Jiao Yin Schroder Global Selected Value Fund and the Jiao Yin Schroder China Internet Fund tracked by the CSI Overseas China Internet IndexThe management fee was reduced to an attractive 1.2% per annum from a previous rate of 1.8%, while the custody fee fell to 0.2% from 0.35%. Such a substantial cut illustrates a marked willingness to enhance investor returns through decreased costs.

Closer to the start of February 2023, on the 8th day of the month, the Fuqua Fund also made a strategic announcement aimed at aligning with the trend toward lowered feesThey declared that as of February 10, 2025, they would reduce both management and custody fees across several funds, including the Fuqua Global Technology Internet Equity Fund (QDII) along with five other productsThe new management fee set at 1.2% represents a notable decline from the previous range of 1.5% to 1.8%, while the custody fees were uniformly adjusted to 0.2% from a range spanning 0.3% to 0.35%. Such reductions echo a faster shift toward a standard fee structure within the industry.

Moreover, it is noteworthy that other significant players in the fund management arena, such as Haitong Fund and Southern Fund, are joining the movement to reduce fees

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An analysis of the market indicates that since the beginning of 2023, over 80 QDII products have publicly announced fee reductionsAs a result, a “1.2% + 0.2%” fee structure has emerged as a prevalent standard for actively-managed QDII funds, illustrating the industry's collective strategy in enhancing competitiveness amid a shifting regulatory landscape.

Professor Tian Lihui, a finance expert from Nankai University, points out that the current wave of fee reductions is driven by a confluence of regulatory guidance, mounting market competition, and changing investor demandsFrom a regulatory perspective, there have been indications of intent to further decrease sales expenses related to funds, illustrating an ongoing commitment to reforming mutual fund feesMarket dynamics have also shifted, as increased competition and growing sensitivity among investors regarding cost pressures fund companies to adjust their pricing models to enhance investor satisfaction and bolster competitive standing.

Furthermore, these developments cannot be divorced from global economic uncertainties and increasing volatility in international markets, which can influence investment strategiesIn light of these challenges, lowering fees to attract a broader base of investors has become a strategic imperative for fund companies navigating this complex terrain.

The reform of public fund fee structures is a pivotal component of the broader initiatives within capital markets aimed at deepening reformThe formal initiation of changes targeting fund industry fees has resulted in a discernible decline in overall average fees, which has gradually transitioned from a reactive measure to a proactive strategy for fund companies eager to support their client base.

On January 23, 2023, specific reform measures were introduced, culminating in a preliminary plan aimed at sustained and systematic fee reductionsThe blueprint delineates ambitious objectives, such as progressively lowering the composite fee levels associated with public fund management over time

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