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Cerulli: Equity funds dip as share of Chinese mutual fund AUM

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Equity funds now constitute less than half of all Chinese open-end, mutual fund assets under management, new research shows.

Cerulli Associates, Boston, released this finding in a summary of results from a new report, “Asset Management in China 2012: A Five-Year View, 2012-2016.” In its eighth iteration, the study examines the asset management opportunities presented by China’s retail and institutional segments, focusing on market sizing, product trends, distribution patterns, fees and profitability.

The report shows that equities fell in June to 25.6 percent of open-end mutual fund assets under management. This compares to 48.8 percent in 2011, 54.5 percent in 2010 and 59.4 percent in 2007.

Balanced mutual fund portfolios also declined as a share of AUM, falling to 25.6 percent in June 2012 from 28.1 percent in 2011 and 32.7 percent in 2010.

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In contrast, bonds’ share grew to 9.4 percent in June 2012, up from 5.5 percent in 2011, 5.2 percent in 2010 and 2.2 percent in 2007.

Money market funds also rose as a share of assets of under management, attained 16.5 percent in June 2012. Money market’s share in 2011, 2010 and 2007, the report finds, totaled 14.9 percent, 6.6 percent and 0.5 percent, respectively.

Turning to Chinese national Social Security Fund assets by management type, the Cerulli report finds that internally managed funds constituted the majority of such assets in 2011, accounting for 58 percent. Mandated assets made up the balance at 42 percent.

These percentages are little changed from 2010 when internally managed assets and mandated assets garnered 58.1 percent and 41.9 percent, respectively.