Beijing has given the leading two state-approved mutual fund managers the mandate to run a second fund each but will for the first time link their management fees to performance.
Analysts said approval for the new funds marked the second phase of Beijing's initiative to nurture the nascent fund-management industry to provide retail investors with a diversified and long-term avenue to play the volatile markets.
'It has been more than a year since the introduction of state-approved mutual funds; it's about time to improve the scheme,' said fund analyst Xu Bing.
The two additions are larger and incorporate a performance-linked yardstick aimed at addressing widespread criticism that fund managers in the first batch generally fail to deliver despite earning fees reputed to be the highest in the world - 2.5 per cent of a fund's net asset value.
Capitalised at three billion yuan (about HK$2.79 billion) each, Anshun Fund, managed by Hua'an Fund Management, will tomorrow issue new units at 1.01 yuan each, as will Yulong Fund, run by Boshi Fund Management, in Shenzhen.
Hua'an runs Shanghai-listed top-performing Anxin Fund, and Boshi, the Shenzhen-listed Yuyang Fund.
This will bring to 12 the number of mutual funds introduced since April last year. The first 10 funds are all capitalised at two billion yuan each, and are closed-end and mature in 15 years.
