While most businesses in China have stalled due to the coronavirus, the country’s mutual fund industry continues to be resilient, according to a Z-Ben Advisors report.
Fundraising activity for mutual fund products continues to be active, with a number of new products attracting huge amounts of capital from investors.
For example, Penghua Fund Management was able to attract $1bn for a balanced fund earlier this month, while Wanjia Asset Management was able to raise $430m for a similar product this week, according to the report.
“This continued momentum is largely thanks to strong market performance over the past week,” the report said. While the Chinese equity market plunged by around 8% earlier this month, the market has since slowly recovered, according to FE Fundinfo data.
“But managers can take credit for hearty promotional efforts. Highlighting experienced portfolio managers with good track records continues to be the soup du jour,” the report added.
Investors have also continued to invest in ETFs. According to a local media report, the Ping An CSI New Energy Automobile ETF, which was listed on 10 February, was able to attract around RMB 517m ($74m) in assets on that day alone.
Similarly, investors in Hong Kong have also poured money this month into a number of China-focused ETFs.
More fund launches
More fund managers are also expected to continue launching funds in the market this month, which include Fullgoal Fund Management, ICBC Credit Suisse, Bocom Schroders and E Fund Management, according to the Z-Ben report.
“The remainder of February makes for a packed schedule. Distributors are gearing up for launches from a host of heavyweight equity managers,” the report said.
Z-Ben also noted that Foresight Fund Management’s second mutual fund product, which will also be launched later this month, is “bound to hog much of the spotlight”, adding that its first fund that was launched last year now has $1.5bn in assets.
“Banks, still crawling back online in many places, are already warming up their channels in preparation of [Foresight’s second product] – much earlier than they did for other launches in recent memory,” it said.