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People's Daily Online>>China Business

Fund industry's loss tops 500 billion yuan in 2011

By Zhao Ruixi, Wu Caixia (People's Daily)

16:11, February 07, 2012

Edited and translated by People's Daily Online

In 2011, the overall loss of fund industry exceeded 500 billion yuan, which is a heavy blow to fund investors. Fund industry is embarrassed in an active issue but inactive subscription situation. There are 16 funds issued early this year and hundreds of new funds to be issued and/or approved.

Fund investors feel miserable facing a rapid shrinking of net value of fund. To redeem with considerable loss or to cover with unknown risks, that is a question. Insiders said that the loss is primarily caused by the poor performance of the Chinese stock market. On the other hand, obvious defects in investment philosophy, investment ideas and strategies by certain fund companies also caused the losses.

Liu Hongru, chairman of Capital Market Research Society and former president of China Securities Regulatory Commission (CSRC), said that fund industry is now standing at a crossroads, waiting for urgent reform, innovation and breakthrough.

First, the industry should make a transition to asset management companies to seek new models and approaches for development; and this is a matter of development of ideas. Second, the industry should address the difficulties in long-term capital sources and expanding investment scope for development of fund industry by means policy support; and this is a matter of major laws and policies. Third, it should ensure a fair competition at the level of regulatory standards, i.e. the regulatory agencies can be diversified while the regulatory standards applicable for same products should be uniform.

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