Chinese FMCs left red-faced by industry stats

May 18, 2011

Regulatory relaxation has prompted a flood of new funds, but industry AUM is shrinking. Fund supply is growing faster than demand, and net redemptions are increasing.

Chinese fund management companies (FMCs) find themselves in an embarrassing position: new products launches are gathering pace, yet industry AUM keeps shrinking. Overall assets under management declined 4.3% to Rmb2.39 trillion ($367 billion) in the first quarter of 2011. Yet this year to early May, 63 newly incepted funds have raised a total of Rmb111 billion, with a further 29 funds under IPO as at May 18. The China Securities Regulatory Commission (CSRC) has relaxed the new f…

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