There are 22 asset management joint ventures established in China by managers ranking among the top 50 global firms. At the end of 2017, the joint ventures had 989 actively-managed mutual funds (excluding money market funds) on the domestic market.
The aggregated AUM in these funds was RMB 885.4bn ($140bn) at the end of 2017, down slightly from RMB 894.5bn a year earlier, according to data from Morningstar. (Data for around 50 of the 989 funds is not available.)
During the year, investors withdrew an estimated RMB 188.9bn from the JV’s mutual funds, with aggregate net outflows across most asset classes.
The decline brought down the marketshare of foreign asset management JVs, by AUM, to 22.6%, down from 24% a year earlier.
(The figures all exclude money market funds, which in some cases account for a large portion of AUM).
Minsheng Royal, a joint venture with the Canadian bank RBC, was the most successful net asset gatherer, as inflows into its two short-term bond funds have more than offset outflows from long-term bond and mixed-asset funds.
BOC International, a joint venture with Blackrock, manages only one fund with large assets, the AnJin Bond Fund, which was launched in the fourth quarter of 2016 and saw a big uptake in the early 2017.
Short-term bond funds helped Citic-Prudential attract new assets, while HSBC Jintrust’s top asset gatherer was its Large Cap Equity Fund − mostly in the first two quarters of 2017.
China’s foreign asset manager JVs (RMB)
|Joint Venture||Number of funds||AUM Dec 2016||AUM Dec 2017||Est. flows 2017|
|Minsheng Royal (RBC)||42||26.69bn||45.81bn||11.51bn|
|BOC International (Blackrock)||13||35.24bn||45.05bn||9.29bn|
|China International (JP Morgan)||56||39.36bn||58.27bn||22m|
|Deutsche Bank (China)||9||843m||768m||-170m|
|Franklin Templeton Sealand||29||13.03bn||16.53bn||-617m|
|SWS MU (Mitsubishi UFJ)||41||26.75bn||35.6bn||-1.08bn|
|Invesco Great Wall||57||42.93bn||51.07bn||-2.05bn|
|Bank of Communications Schroders||65||56.18bn||61.72bn||-2.36bn|
|Morgan Stanley Huaxin||23||15.69bn||13.15bn||-2.77bn|
|Everbright Pramerica (Prudential)||34||37.51bn||41.03bn||-5.04bn|
|HFT (BNP Paribas)||42||21.2bn||20.3bn||-8.51bn|
|ICBC Credit Suisse||99||209.42bn||93.56bn||-123.96bn|
Data: Morningstar, as of 31 December 2017, in renminbi. All figures exclude money market funds
Note: December 2017 data is not available for some funds (around 8% of the JV universe, or 6% by AUM). In those cases FSA used the most recent data available.
Weighing money market funds
Money market funds, which are more like certificates of deposit and do not involve active management, are extremely popular in China. The data above has excluded these products. If they are included, a different picture emerges because they tend to comprise a large part of JV assets.
For example, ICBC Credit Suisse has the largest mutual fund business among JVs in China, with RMB 509.9bn of total AUM at the end of 2017. However, 82% of that AUM is from its money market funds. The firm’s other fund categories saw the biggest outflows among all JVs, to the tune of RMB 124bn.
The second largest firm is CCB Principal, with RMB 425.5bn in AUM, 81% of which are money market funds.
Both joint venture firms grew their business substantially in 2017 due to inflows into money market products that offset losses in other funds.