JP Morgan once again placed first in the outbound arena, ahead of UBS in Z-Ben’s annual rankings of global asset managers’ performance in China. Its dominance in the MRF (mutual recognition of funds) programme alongside a scaled QDII (qualified domestic institutional investor) sub-advisory business form the core of this business line. 2023 also saw the manager begin to target southbound wealth management connect.
The manager further extended its inbound leadership into a second year. “While JP Morgan experienced moderate Greater China AUM contraction, its high-fee product line insulated its score, faring better than large index-focussed competitors,” according to Z-Ben.
In general, however, “capital depreciation and outflows were severe in some cases, particularly as China Concept funds lagged far behind returns of other markets. However, a sizable core remains with most institutions only trimming exposure to small-cap A-shares,” noted Z-Ben.
Meanwhile, UBS ousted Invesco from number one spot for onshore mainland China business. However, “it is little surprise that the combined business of two top-tier managers [UBS and Credit Suisse since the merger] produced an incredibly strong mainland score,” said Z-Ben
Its leading position reflects UBS’s multiple onshore fund platforms, including a holding in the large and profitable ICBC Credit Suisse venture.
Other managers prominent across the China business include BlackRock, Invesco, Schroders, HSBC, Manulife, Fidelity, Amundi and AllianzGI, who all made it into the top 10. Notable climbers include Axa (up from 26 to 23) and Amundi up from 12 to 9)
The largest joint-ventures by AUM are China AMC (with Mackenzie), Fullgoal (BMO), Harvest (DWS), Penghua (Eurizon), CCB Principal, ICBC Credit Suisse (UBS), Guotai (Generali), Aegon-Industrial, Invesco Great Wall and BOCOM Schroders.
Looking ahead, Peter Alexander, managing director of Z-Ben Advisers sees “see a clear bifurcation in terms of willingness to assume business risk; early entrants have products on shelves while few other global groups commit to the market”.
Alexander agrees the “sentiment in China investment space remains dismal” but accuses global managers of adopting policies “of inertia that simply don’t fit into a growth market such as China.”
