China’s mutual fund assets breached the 30 trillion RMB (US$4.13 trillion) mark for the first time to hit a record 30.2 trillion RMB in the second quarter, driven by demand for bond funds, according to IIC Analytics.
Assets rose 12.7% from 26.8 trillion RMB at the end of 2023.
The 12,000 registered mutual funds drew 1.83 trillion RMB of net inflows in the three months to June, up from 1.56 trillion RMB in the first quarter.
Of this, 1.2 trillion RMB went into bond funds as investors sought “low risk, yield enhancement instruments”, IIC Analytics, a Shanghai-based investment consulting firm, says in a report on July 29.
Money market funds were also popular, attracting over 620 billion RMB of inflows.
Passive equity funds only drew 92 billion RMB, the lowest quarterly inflow since the first three months of 2023.
According to the report, the drop was due to slower purchases by the “national team”, referring to state-owned financial institutions that buy stocks to prop up the local stock market.
Fund managers whose offerings were dominated by fixed income made the biggest gains in the second quarter, according to the report, underscoring investor appetite for bonds.
Guangzhou-based GF Fund Management was the best performer among the 163 mutual fund managers, with 110 billion RMB of net inflows. Bank of China Investment Management was second with 75 billion RMB of inflows.