China A-shares rally boosts mutual fund assets

25 August 2014   Category: News, Asia, China, Global   By Hui Ching-hoo

Mainland China’s mutual fund industry saw an increase of 204.3 billion RMB (US$32.69 billion), or 5.6% year-on-year, in AUM in July, on the back of a rally in the A-shares market.

According to data from the Asset Management Association of China (AMAC), overall assets ballooned to 3.81 trillion RMB, as the benchmark Shanghai-Shenzhen CSI300 Index rose 8.5% during the month.

Equity funds appeared to be the main beneficiary from the stock rally, gaining 40.8 billion RMB, or 4.4% year-on-year in AUM, to around 1.04 trillion RMB as of the end of July. Meanwhile, hybrid funds’ AUM scaled up 4.45 billion RMB to 564.3 billion RMB. The performance of bond funds was meek by comparison; up 966 million RMB to 271.5 billion RMB.

Money market funds (MMFs) bounced back from a net redemption in June, racking up 160.3 billion RMB in new AUM in July to 1.74 trillion RMB.

However, the recent downside correction in bank deposit agreements continued to pressure annualised returns for MMFs, with the majority of products’ yields having dropped below 5% from 8% earlier this year.   

Despite the unfavourable conditions, Wang Dengfeng, portfolio manager of the Tianhong Zenglibao MMF, previously told local media that the fund would not alter its investment style because of the changing interest rate environment, adding that the fund’s yield has returned back to a “normal level”.

Tianhong Zenglibao is one of the flagship MMF products of the Mainland’s largest asset manager, Tianhong Asset Management.