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Power Players: China’s Top 20 Asset Managers of the Year

China’s 20 largest asset managers together topped $1 trillion in assets in 2016.

  • Allen T. Cheng

From The China 20 2016 ranking

Beijing-based China Asset Management Co., one of the nation’s leading fund managers, went to the markets with all guns blazing in the past year. Among its achievements, it launched a record 20-plus new funds, covering a range of strategies from money markets to bond funds to balanced funds. The result: a record 70 percent increase in assets under management.

With $158 billion in AUM as of March 31, China AMC rises a notch to No. 1 in Institutional Investor’s annual ranking of the Middle Kingdom’s top 20 fund managers. “We launched more than 20 funds through September — with the vast majority achieving positive returns, with the highest yield being more than 20 percent for investors — this was a key reason behind our success, says China AMC’s chief executive officer, Tang Xiaodong.

Tang remains optimistic about the year ahead, especially with the Chinese government about to launch a stock trading program that allows investors in Shenzhen and Hong Kong to trade in each other’s markets, the second such cross-border program after the 2014 launch of the Hong Kong-Shanghai Stock Connect that gives investors mutual access.

Institutional Investor, which has been ranking China’s top 20 fund managers by AUM since 2005, aims to showcase the industry as it matures. As of March 31, the top 20 funds managed combined AUM of $1.1 trillion, up 28 percent from the $849 billion of the previous year. With $1.1 trillion, the top 20 control roughly a sixth of China’s $6.2 trillion retail and high-net-worth investing market, according to Shanghai-based research firm Z-Ben Advisors.

“The biggest trend over the 12 months in this industry was the strong rise of the institutional business,” says Ivan Shi, director at Z-Ben Advisors, noting that much of the growth in AUM came from banks’ mandates to segregated account products, especially fixed-income portfolios, as well as investments into bond mutual funds. Shi also notes that many managers have also been offering more offshore investment products — funds that utilize the stock connect program.

ICBC Credit Suisse Asset Management Co., a joint venture between China’s largest retail bank and the Swiss banking giant, saw its AUM rise 50 percent in the 12 months through March 31, helping the firm leap to No. 2 from No. 8 last year. The firm achieved its success on the back of investing in research, with the establishment of 12 investment and ten research centers, venues where it trains its analysts and fund managers.

Fan Yue, the chief product officer of Guangzhou-based E Fund Management Co., also notes that investing in new product development is critical to success. “The company will continue to introduce new fund products in the country to meet the needs of investors,” says Fan, noting that the company launched 26 new products, helping E Fund’s AUM grow 7 percent to $72 billion in the 12 months through March 31. Fan, however, acknowledges the firm must strive even harder in the coming year as E Fund’s ranking fell a notch to No. 5 in the China 20. “The company is actively grasping the investment opportunities brought by Shenzhen-Hong Kong-Shanghai connects and strives to research and design new products to meet the needs of investors,” he adds.

Tang of China AMC sees only upward momentum for the industry in the medium term. With the yuan formally incorporated into the International Monetary Fund’s Special Drawing Rights basket in October, and the launch of the Shenzhen-Hong Kong Stock Connect, Tang says the chances are high that mainland equities, or A shares, will be included in the MSCI emerging-market indexes. “If and when the inclusion happens, it will lure more global funds into the Chinese stock and bond markets, and that could only be a good thing for the industry as a whole,” Tang says.