Equity funds yield -25.6% in Q3
China’s equity funds on average returned -25.6% in the third quarter compared to the previous quarter.
A fund managed by JYVP Fund was the worst performer, with net asset value shrinking 44.7%. The best performer in Q3 was an environment-themed fund from Fullgoal, which returned 119% compared to Q2.
A total of 367 equity ETFs returned -29% on average. The average return of 464 bond funds was -0.6%, while 234 money market funds returned 0.6%.
cnstock.com, October 23
Shanghai-London stock connect studied
Britain and China issued a joint declaration that said both countries support a feasibility study for a stock connect scheme between bourses in London and Shanghai.
Xinhua, October 22
QDII funds return -1.76% in Q3
QDII funds (used by domestic investors for overseas investment) on average returned -1.76% in September compared to the previous month and -9.92% in the first three quarters of the year (compared to the same period in 2014).
QDII funds are receiving major capital inflows as Chinese seek more overseas investment to mitigate the risk of further yuan devaluation. QDII funds had net inflows of 1.3bn yuan ($204.4m) in September.
23 QDII funds had to set upper limits on subscriptions as they were running out of quotas. No new QDII quotas have been approved by the People’s Bank of China in the last six months.
China Securities Daily, October 22
CSRC hires news vice chairman
China’s securities regulator, the CSRC, appointed Fang Xinghai as vice-chairman. Fang will replace the retiring vice-chairman Liu Xinhua to lead the CSRC’s international department. Fang has a doctorate in economics from Stanford University.
Former posts on Fang’s resume include economist and investment official at the World Bank, director of coordination at the China Construction Bank and deputy chief of Shanghai Stock Exchange. The reform-minded Fang is also a member of the team led directly by President Xi Jinpin to coordinate economic and financial reforms.
Caixin.com, October 20
MRF service platform to be unveiled end this year
A service platform for the Mutual Recognition of Funds will be put into use before the end of this year, said Lin Fan, deputy chief of Shenzhen Stock Exchange, at an industry forum. The platform, which is infrastructure for the mutual recognition of funds between mainland and Hong Kong, has undergone several tests, said Lin. The MRF was launched on July 1, 2015, but no funds have yet been approved for distribution by the Hong Kong and mainland regulators.
Caixin.com, October 20
Money market ETFs see major outflow
A total of 17bn units were redeemed from money market ETFs over the week ending October 16, with the most anaemic ETFs losing more than 20% of their assets under management. During the same week, the Shanghai Composite Index was up 6.5% compared to the previous week.
Eight listed money market ETFs, which invest in local short-dated debt instruments and cash, experienced the fastest AUM growth seen in any ETF asset class on record, with over $37bn of new inflows over the third quarter. The eight ETFs more than tripled their collective AUM from three months ago, as investors fled to safety during the summer market volatility.
China Fund, October 19
GF Fund opens London office
GF Fund Management’s London office is the first European subsidiary opened by a Chinese asset manager. The Guangzhou-headquartered firm received a license from UK regulator FCA to practice asset management. With $48bn in assets under management, GF Fund is one of the top 10 asset managers in China.
Shanghai Securities Daily, October 19