Strong growth seen in China’s mutual fund industry in the second quarter

China’s mutual fund industry rebounded strongly in the April-June period as market sentiment stabilized, according to the latest industry data.

The net worth of equity and balanced funds jumped 7.3 percent quarter-on-quarter to 6.34 trillion yuan ($940 billion), according to statistics from the Asset Management Association of China (AMAC).

Driven by hot subscriptions for interbank depository funds and bond funds in the second quarter, the size of non-cash investment funds increased 10.1%, or 790 billion yuan, from the previous three months, to reach a total of 8.680 billion yuan.

Due to fluctuations in the A-share stock market and virus-induced uncertainties, retail investors have shown greater risk aversion and increased their allocations to fixed-income products more for stable returns, said a Broad Fund official.

This strategy resonated with Helen Tu, a civil engineer in Shanghai who hoped to get a higher return from fund investments than bank deposits and wealth management products.

She made her fund investments on Alipay, a popular mobile payment network mostly used in her daily life for almost everything.

Tu chose balanced funds that invest in both stocks and bonds among the so-called “golden funds” touted by Ant Hangzhou Fund Sales Co, a third-party online fund sales platform on Alipay.

Benefiting from a huge number of users, Ant Fund overtook banks, once again, as the top Chinese non-monetary mutual fund in the second quarter.

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Outstanding non-cash mutual funds sold by Ant’s fund sales arm were worth 1.32 trillion yuan, followed by China Merchants Bank and Shanghai Tiantian Fund Distribution Co, another independent fund adviser, according to the ranking of AMAC.

Sales of equity funds and balanced funds by China Merchants Bank totaled 709.5 billion yuan, making it the largest seller of non-money market fund fund products.

During the April-June period, domestic mutual funds reversed the defensive stance in the first quarter, said Meng Lei, China equity strategist at UBS Securities.

The sectors with the largest weighting gains are beverages, electrical equipment, automotive and non-ferrous, while electronics, banks, pharmaceutical chemicals and energy saw the largest declines in weight. weighting, he added.

“For equity investments in the coming years, the opportunities far outweigh the risks,” Cao Mingchang, fund manager at Zhong Ou AMC, said in a quarterly report.

Sectors like real estate, infrastructure and financials have the potential to bring positive returns in the future, he advised.

For the second half of the year, Shan Kun, bond fund manager at Schroder Investment Management (Shanghai) Co, said he has a relatively cautious investment attitude towards the bond market and is relatively optimistic about the performance of high-end bonds. quality and of short duration.

A total of 324 funds were newly launched in the second quarter, raising a total of 411.1 billion yuan.

As of June, 153 licensed fund companies managed 9,872 mutual funds with 26.2 trillion yuan in assets under management, according to the industry association.

Dolores W. Simon