Posted inChina

China this week – 15 April 2016

A roundup of the week's asset management news from the mainland.

First bond fund approved for MRF southbound sales

In the past two weeks, eight onshore China funds under the Mutual Recognition of Funds scheme have been approved for sale in Hong Kong. 

Bosera Asset Management had two more funds approved, the Bosera Value Mixed Fund and the first MRF pure bond fund, Bosera Credit Market Bond Fund.

China Merchants Fund Management also had its China Merchants Antai Series Open-end Securities Investment Fund approved for sale.

Newcomers include Harvest Fund Management, which introduced the Harvest Growth Income Fund and Harvest Research Select Fund, and CCB Principal Asset Management with its CCB Principal Selected Growth Mixed Asset Fund.

Securities and Futures Commission, April 13


China asset management scale doubled in size

The asset management industry reached RMB 39.4trn ($6.1trn) in scale last year, almost double from 2014, according to the Asset Management Association of China. Securities companies were on top with RMB 11.9trn of assets under management, although only roughly one-fourth of them have an active management business. 

Subsidiaries of fund management companies, which provide separately managed account services for specific clients, accounted for RMB 8.6trn, followed by mutual funds with RMB 8.4trn in AUM. 

Fund management subsidiaries (comprised of 79 fund management houses), saw asset size shoot up by RMB 5.trn. This group launched 13,400 products last year, more than any other type of business in the asset managment industry.

Finance and Investment, April 13


QFII and RQFII quota mull change

Investor quotas under its Qualified Foreign Institutional Investor (QFII) scheme might be cut if an investor does not use up 60-70% of the allotment within a year after it is approved, according to Reuters.

Meanwhile, mainland authorities are looking at expanding the quota restrictions for RQFII that allows yuan raised offshore to be invested in onshore assets, according to a Bloomberg report. The government may also grant more flexibility to investors, but no details were given.

Reuters and Bloomberg, April 12


Shanghai wealth management firm crashing down

Zhongjin Capital Management, a big-profile wealth management firm, had 21 executives arrested on April 5 on suspicion of “illegal fundraising”. The only person named by Shanghai police so far has been top executive Xu Qin, who local media said had been arrested at the Shanghai airport on his way to get married in the Vatican.

Chen Jiajing, the 29-year-old chairwoman of Zhongjin’s parent Guotai Investment Holdings, cannot be located. Public statements issued this week by two Hong Kong-listed companies in which Guotai is a major stakeholder, indicated they had been unable to reach her. Many investors queued in its Shanghai office, hoping to get back their investments.

Reuters, April 8


Dutch pension fund looking into China

Eduard van Gelderen, CEO of Netherlands-based APG Asset Management, which manages pension assets for Dutch citizens, said it might consider investing in China’s fixed income products, followed by equity investments. Van Gelderen said the ultra-low interest rate environment in Europe makes the China market more attractive, as benchmark returns from the Chinese bond market can already fulfill the yield requirements of its fund. APG said now the fund requires roughly a 5% yield per year.

It will also look into long-term infrastructure investments in China.

Securities Daily, April 9


Mainland funds cut fees

About 10 onshore China funds have lowered their fee levels since the start of this year, including those under Invesco Great Wall, E Fund Management and HSBC Jintrust.

Management fees of an Invesco Great Wall fund were cut to 0.6% from 0.8% per year, the same reduction level as three funds from E Fund.

About 60 funds slashed the management fee in 2015.

The adjustments were due to the trend of newly-launched funds with low fees. Some funds also cut the fees to address the demands of institutional clients. 

Some new funds also adopt a floating fee level approach, which is performance-linked.

Securities Times, April 14

Part of the Mark Allen Group.