The New York-based hedge fund manager will be competing against other foreign managers that have launched quantitative products in China.
Among the proposed rules are a requirement that an asset management firm inject at least RMB 10m ($1.5m) into mutual funds that levy a performance fee.
Fidelity International has announced the launch of its China Bond No.1 Private Fund, the first ever fund product launched by a foreign firm in China.
Shanghai-Hong Kong-Shenzhen-themed mutual funds are getting strong inflows as mainland investors worry about RMB risk and the property market.
Guaranteed funds in the mainland, worth RMB 320bn ($46.5bn), will be called “risk-hedging strategy funds” to reflect potential risks, according to the new guidelines released by the China Securities Regulatory Commission.
Assets under management rose 36% to RMB 51.8trn ($7.54trn) in 2016 according to data from the semi-official Asset Management Association of China (AMAC).
Onshore mutual funds topped RMB 9.16trn ($1.33trn) in assets at the end of last year, up 9% from 2015, according to the latest monthly data from the semi-official Asset Management Association of China (AMAC).
Consultant Z-Ben Advisors believes that if Vanguard were to come onshore tomorrow with its current strategy, it would not have much traction because returns are more important than low fees in China.
Each onshore mutual fund manager needs to take care of 3.12 funds on average, according to a Morningstar report.
The upcoming launch of mutual fund of funds as well as banks outsourcing more wealth management products (WMPs) to asset managers should help grow onshore fund assets, analysts said.