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Great Prospect for Open-ended Funds in China
Open-ended funds will become the main stream in the Chinese stock market in the next five years.The new type of fund is expected to inject fresh blood into the institutional investors and push them to upgrade management.
Top securities officials have expressed their support for open-ended funds. Though no official timetable has been announced so far, there are signs in the securities circle heralding a close debut of the first open-ended fund in China. Passion for the fund is high from top to bottom.
Chinese fund management firms are taking bolder actions. Most of them have designed their own outlay for open-ended funds after thorough investigation and analysis.
Several of them, including Hua'an and Penghua, have formed alliances with foreign counterparts to acquire technical support in the sector.
Analysts said the move signals that the work to set up open-ended funds has come into a formal preparation period in China.
Presently, China has only closed-end funds and the securities market is still dominated by retail investors, which have nurtured more speculation sentiment.
Experts said open-ended funds, with more transparent operations and high requirement for management and risk control, will push domestic fund managers to improve themselves, which will help them become better prepared for foreign competition after China joins the World Trade Organization.
It will also boost institutional investors and help change the retail dominated status in the bourses.
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