Fidelity, Neuberger Berman latest foreign entrants in China’s US$3.7 trillion mutual-fund market
- Plan to build a diversified financial-services company in China, with a strong footprint in pensions and asset management, Fidelity executive says
- US asset manager Alliance Bernstein also given the go-ahead by CSRC to set up its first mutual-fund business on the mainland
Fidelity is set to launch its first mutual-fund product in China on April 3, becoming the third foreign asset manager to expand in China’s mutual-fund market, after winning approval from Beijing in December. BlackRock and Neuberger Berman won approvals for wholly-owned mutual-fund entities in August 2020 and November last year, respectively.
Fidelity’s first mutual fund and first retail fund is an equity solution investing in A shares and H shares, with a focus on consumption, real estate and industrial companies.
“Over the coming years, we plan to build out a diversified financial services company in China, with a strong footprint in pensions and asset management, and a mission to help investors achieve their long-term financial goals,” Rajeev Mittal, managing director for Asia-Pacific excluding Japan at Fidelity International, said on Friday.
China will make efforts to further attract foreign capital and investors, Chinese Premier Li Keqiang said in his work report, the document laying out China’s key annual goals, at the opening ceremony of the National People’s Congress on Sunday. The country will further expanding market access for foreign investors, especially in the services sector, Li said.
More foreign players are expected to get approvals to gain access to the Chinese market, said Li Huang, associate director, fund and asset manager ratings, at Fitch. “But this will not happen in a fast way,” she said.
China, as the third-largest mutual-fund market after the United States and Europe, “has potential to further grow”, she said. “[China’s] money market fund managers charge much higher management fees than their peers in the US and Europe. The Chinese market will bring not only higher market share but also more revenue for foreign asset managers.”
The new unit, wholly owned by its Hong Kong branch, needs to wrap up the establishment of the fund, including finalising management within six months, the CSRC said.
Alliance Bernstein, with more than 20 years in China, “highly values the Chinese market”, and is confident about further expanding its business in China, the company said in a WeChat statement on Friday.
The commission also allowed Standard Chartered to set up a wholly-owned securities brokerage in January, which allows it to offer services such as underwriting and asset management on the mainland.