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China mutual funds set for year-end closures as demand fades
About 256 publicly offered China mutual funds have been liquidated this year, and another 46 are warning they may close, pointing to more than 300 closures by year-end.
China’s mutual fund industry is on track for its fastest closures in eight years as weak returns and investor redemptions have left many products too small to operate, according to LiveMint Markets citing Bloomberg-compiled data.
About 256 publicly offered funds have already been liquidated this year, and another 46 are warning investors they may soon close, implying potentially more than 300 product closures by year-end.
The outlet reports that this follows a prior wave of liquidations that peaked in 2018, when industry reforms triggered fund shutdowns. It also points to a shift in investor behavior after years of new fund launches spurred by efforts to channel household savings into capital markets.
LiveMint Markets says the latest spike is linked to a 2023 industry initiative requiring fund companies to manage their own products, alongside a rule that mandates closures after three years if assets fall below a set threshold. It also notes that products can be affected if they are too small, have too few investors, or consistently underperform, though the quote is cut off in the provided text.