China’s fund industry has been a microcosm of evolution and the first quarter of 2010 shows little changes in the landscapes. The largest fund companies continued to dominate while the rest firms scrambled for crumbs. As the competition intensified among the smaller players, some surprises emerged on the horizon.
China’s top 10: Gaining Market Clout
China’s top 10 largest companies not only managed to keep their thrones but also slightly increased their market clout to 49.59 percentage of overall China fund industry’s asset under management in the first quarter of 2010.It shows that the investors opted for the big names amid uncertainty in the equities markets. While China AMC still took the first place for consecutive quarters, E-Fund also emerged to challenge its number one status. Thanks to the growing popularity for E-Fund’s index products, it increased market share by sixty eight basis points within a three month period.
China’s Bottom 10: Two Surprising Outliers
In contrast to the deadlock among big players, the AUM ranking reshuffled for the bottom ten boutique fund companies since last year end. Eight of them had different rankings this year. Among which, Morgan Stanley Huaxin has made the most progress, climbing six places to the fifty second. Minsheng Royal came as second with three places increase in ranking. Their progresses meant the regresses for the other six firms with Lombarda China and Golden Eagle lost the steam.
Key Attribute to the Success of the Outliers
The rise of Morgan Stanley Huaxin and Lombarda China was not by sheer fluke. These boutique fund companies were among the few outliers that grew their size of asset under management in the backdrop of falling AUM for China fund industry as a whole. Morgan Stanley Huaxin’s top performing funds attracted huge capital inflows to the firm while Minsheng Royal’s marketing campaigns for the new funds contributed to its success in gathering assets.
These two also illustrated the story of current outliers in China’s fund industry. For the new comers, marketing campaigns matter. It can help garner investors’ attention and assets. The existing funds with track record of success are easy to gather assets, even when the outperformance is relatively short. Investor’s preference feeds on the industry’s persistent practice in performance chasing, especially for boutique fund companies.
China’s Top Ten Fund Company (ranked by asset under management)
Fund Name | # of funds | AUM (100 million,RMB) | Ranking | Market Share | |
2010 Q1 | 2009 Q4 | ||||
China Asset Management Co.,Ltd | 23 | 2399.52 | 1 | 10.46% | 10.54% |
E Fund Management Co.,LTD | 20 | 1458.31 | 2 | 6.36% | 5.68% |
Harvest Fund Management Co.,Ltd | 18 | 1329.41 | 3 | 5.80% | 5.64% |
Bosera Fund Management Co.,Ltd | 17 | 1202.72 | 4 | 5.24% | 5.60% |
China Southern Fund Management co.,Ltd | 21 | 1101.14 | 5 | 4.80% | 4.72% |
GF Fund Management Co.,Ltd | 11 | 964.56 | 6 | 4.21% | 4.43% |
Da Cheng Fund Management Co.,Ltd | 16 | 859.82 | 7 | 3.75% | 3.77% |
HUA AN FUND MANAGEMENT CO.,LTD | 14 | 723.2 | 8 | 3.15% | 3.26% |
Yinhua Fund Management Co., Ltd. | 12 | 723.1 | 9 | 3.15% | 2.93% |
Bank Of Communications Schroder | 10 | 610.42 | 10 | 2.66% | 2.73% |
