Fidelity, Neuberger Berman latest foreign entrants in China’s US$3.7 trillion mutual-fund market

Name: China's 'two sessions': Premier Li Keqiang emphasises achievements, economy in final work report
Uploaded: 2023-03-06T06:32:05.000Z
Duration: 2 min 52 s
Description: China's 'two sessions': Premier Li Keqiang emphasises achievements, economy in final work report

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

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International fund managers are vying for China’s fast growing mutual-fund market, which has grown at a compound annual growth rate of about 20 per cent over the last five years, according to Fitch Ratings. Photo: Bloomberg

Iris Ouyang

Published: 2:32pm, 6 Mar 2023Updated: 6:11pm, 6 Mar 2023

Foreign financial institutions such as Fidelity International and Neuberger Berman have accelerated the launch of mutual funds and wholly-owned units in mainland China to tap its 26 trillion yuan (US$3.7 trillion) mutual-fund market, as Beijing vowed to further open its services industry during its annual “two sessions” parliamentary meetings.

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.

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China's 'two sessions': Premier Li Keqiang emphasises achievements, economy in final work report

International fund managers have been vying for China’s fast growing mutual-fund market, which has grown at a compound annual growth rate of about 20 per cent over the last five years, according to Fitch Ratings. What has added impetus to this is China hammering out a private pensions scheme for an ageing population of 1.4 billion. The need for international fund managers has become more urgent with Beijing calling for financial institutions to offer more diverse pension products, such as fund-of-funds and wealth-management products.

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.