The three multi-asset FoFs are managed separately by CIFM Asset Management, First Seafront Fund Management and ZhongRong Fund Management, according to statements on China Securities Regulatory Commission’s (CSRC) website on 6 March.
Hong Kong-domiciled funds that are sold in the mainland via MRF scheme are considered CSRC-approved, and are therefore eligible to receive investments from FoFs. The MRF products have grown assets through FoF investments, according to a report by Boston-based research firm Cerulli Associates.
China’s retail FoFs are public funds that invest more than 80% of their assets in other CSRC-approved funds, but cannot invest more than 20% of their assets in one single fund, according to FoF guidelines.
9 approvals, 76 applications
Following the finalisation of the guidelines for retail FoFs in September 2016, only nine such products have been granted approvals. The first batch of FoFs was approved for launch in September 2017. They managed to raise a total of RMB 16.6bn ($2.62bn) in assets during their initial public offerings.
A fund offered by China Asset Management Company, which partnered with US-based Russell Investments, attracted 107,276 investors who subscribed to the product in just 13 days, according to Cerulli. It raised RMB 4.68bn in assets, making it the largest in the first batch. China Southern Fund Management’s All Weather Strategy FoF, was second, having raised RMB 3.3bn.
In total, 76 applications for FoFs have been submitted by 40 fund managers and are awaiting approval, according to the regulator’s records, according to Cerulli. The largest number of applications came from China Asset Management Company and China Universal Asset Management Company, with four applications each.
The Sino-foreign joint ventures ABC-CA Fund Management, BOCOM Schroder Asset Management and ICBC Credit Suisse Asset Management were also among the applicants. Each filed two applications last year.