Has the successful run of Sino-foreign mutual fund joint ventures hit a snag? After four JVs rolled out products attracting record-breaking subscriptions, the latest offering, from Great Wall Invesco, failed to keep up. The result has the industry scratching its head to figure out if this was a one-off due to market conditions, or a problem intrinsic to the nascent industry.

The JV's debut involved an umbrella fund with equity, bond and cash components. Distributed by Bank of China, it raised $220 million during its launch period, which ended in October.

Compared to the fireworks earlier JVs produced, "It was a damp squib," says a rival.

Invesco officials don't see it that way, of course. "A lot of it has to do with the timing of the fund launch and market conditions," says Andrew Lo, Invesco's Asia Pacific CEO. "The market hasn't been good this year; stocks are down 20% and liquidity is tight as the government tries to slow loan growth...every investor who has bought shares this year has a negative NAV."

He says this means now is a good time to invest, but acknowledges this kind of thinking is a hard sell during a fund's IPO. Overall, he says, "We're satisfied with the fund launch."

Most fund management officials in Hong Kong and Shenzhen believe the relatively low subscription rate was a function of souring market sentiment.

"The timing for Invesco wans't good," says Zhan Long, executive deputy general manager at China Merchants Fund Management, a JV between China Merchants Securities and ING Investment Management. "They did a good job considering the environment."

Says a foreign executive involved in a funds JV, "The industry isn't tired out. It is far too early in the industry's business development."

Other possibilities have been cited: Great Wall Invesco's base in southern provinces doesn't extend north (although Bank of China has a national presence) and the coincidental simultaneous fund IPO by an unrelated fund management company also called Great Wall, which could have created confusion.

Nonetheless, one or two industry players have expressed concern to FinanceAsia fears that the gravy train is losing steam.

China Merchants Fund Management has had the most success in raising assets. The JV launched an umbrella fund that closed in March with $540 million of assets – one of the biggest fund launches in China.

ABN Amro Asset Management's JV with Xiangcai Hefeng Fund Management followed with $340 million; in July, SG Asset Management's JV with Huabao Fortune Trust raised $460 million; in July, Alliance Dresdner Asset Management's JV with Guotai Junan Securities raised $477 million; and in August, Fortis Haitong Investment Management raised $448 million.

"Is the honeymoon over for JVs?" wonders an executive at a foreign house that is in the preparatory stages for launching a Chinese mutual fund with a local JV. "There's potentially a problem because fund houses find it hard to differentiate their product."

There will be several opportunities to find out. The "litmus test", says one executive, will be the upcoming fund launch expected from SW BNP Paribas Asset Management, a JV between Shenyin & Wanguo Securities and BNP Paribas Asset Management.

SW BNP is expected to launch a fund in January. BNP Paribas officials did not return phone calls seeking a comment.

Also in the queue are Franklin Templeton Investments' JV with Sealand Securities, and Prudential USA's JV with Everbright Securities.