E Fund sees heavy redemptions
E Fund Management, the third largest fund house in China in terms of asset size, has seen assets under management shrink by RMB 111.4bn ($17bn) in the first quarter, the most among all of China’s mutual fund managers.
One of the reasons could be that some of its funds took big losses in the first quarter after investing heavily in small- to mid-cap firms, and those on the growth board, which have high valuations.
The resignation of two E Fund veterans, chairman Ye Junying and deputy general manager Xiao Jian last month might also have had an impact.
Beijing Business Today, May 6
New bond funds lower in April
The subscription amount of new bond funds in China shrank by nearly half in April compared to the previous month. There were 21 new bond mutual funds launched in April compared to 25 in March. Each fund issued 611 million units on average in April, compared to 955 units in March.
Shanghai Securities News, May 6
Regulators crack down on fund pooling
CITIC-CP Asset Management, a subsidiary under CITIC-Prudential Fund Management, had its new business suspended for six months after a regulator said it violated rules to operate a fund-pooling business.
Fund pooling in China is when capital is raised from short-term wealth management products and then used to invest in other products with a longer maturity, for example one year. Essentially it means money from new investors can be used to repay existing investors.
The Asset Management Association of China said such fund-pooling investments are illegal and dangerous for investors, likening them to Ponzi schemes. The great risks mean investors could suffer big losses.
Caixin, May 5
Fund houses warm to online distribution channels
Direct online sales platforms have become the key channel for fund houses to distribute their products in the mainland. China Universal Asset Management, for instance, has about 30% of sales coming from the online channel.
More companies have also chosen to run an online platform independent of other traditional distibution methods such as sales through banks or with institutional investors.
Shanghai Securities News, May 4
Gold ETFs rushing in
E Fund Management, Guotai Asset Management and Bosera Funds have launched a gold-focused ETF. More investors are considering allocating assets outside single equities or individual bonds, which have suffered volatile movements in recent months.
China Securities Journal, May 4
