Funds News
- Stock boom boosts mutual fund profit
Date: 23-Jan-2007 Sources: (Shenzhen Daily)
THE country's mutual funds moved into the black in 2006, realizing a combined profit of 124.8 billion yuan (US$16.05 billion), due to a surge in the country's stock market, the Shanghai Securities News reported yesterday.
In the fourth quarter alone, the country's 278 funds run by 53 management companies made a combined profit of 54.15 billion yuan from stock trading, the newspaper said, citing figures compiled by local financial data supplier Wind.
Stocks accounted for an average of 77.56 percent of the funds' total portfolios, which also included bonds and stock warrants, at the end of 2006, it said.
An about 130 percent gain in Shanghai's benchmark stock index in 2006 helped fuel a massive expansion of the country's mutual fund industry as liquidity was diverted from bank accounts and the property market.
Mutual funds raised a record 389 billion yuan last year, nearly quadruple the 2005 amount.
The explosive growth has worried regulators. The China Securities Regulatory Commission (CSRC) in December told fund managers to improve risk controls and stay 'cool-headed?as millions of investors rushed into the market.
Fund managers have said the massive fund inflow put them under pressure, as they had to find stocks to buy to meet internal return targets despite the market's bull run, which started in May last year following a more than four-year slump.
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