China’s big institutional investors see stock holdings fall to historical low
A-share market value held by mutual fund houses falls to 3.4 per cent of the total from historical high of 7.9 per cent
The value of mainland Chinese stocks held by mutual fund houses has dropped to a historical low as a result of the country’s A-share market slump last year, while the market share of funds has been diluted by competitors, according to an industry spokesman.
“Mutual fund houses are the biggest professional institutional investor in China’s A-share market, but the A-share market value held by mutual fund houses has dropped to a historical low of 3.4 per cent from a historical high of 7.9 per cent before 2008,” said Hong Lei, chairman of the semi-official Asset Management Association of China (AMAC).
China introduced the first closed-end fund to the public in 1998 and since then has let fund houses sell products to retail investors who are in turn responsible for related risks, gains or losses.
The benchmark Shanghai Composite Index fell 12 per cent in 2016, making it one of the worst performing markets globally, with each investor suffering an average annual loss of 50,000 yuan (US$7,258) during the year, according to data provided by the Shanghai and Shenzhen exchanges.
By the end of 2016, assets under management in the mutual fund industry were worth 9.16 trillion yuan, Hong said in remarks made in Beijing on Thursday.
The competition is becoming fierce as banks, securities companies and insurance companies are developing asset or wealth management products
In comparison, the outstanding amount of off-balance sheet asset management products offered by banks exceeded 26 trillion yuan, Xinhua reported on Thursday.