This is How Much China’s Mutual Fund Industry Could Grow

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Hua An Fund Management issues a startling projection for the Chinese mutual fund market.

The Chinese mutual fund market could jump 10-fold over the next decade. This prediction comes from Hua An Fund Management portfolio manager David Hu. The manager said that index-tracking mutual funds could reach 6 trillion Yuan in 10 years (or $857.29 billion.)

“Efficiency of China’s market is rapidly rising,” said Xu, who oversees indexing and quant strategies and $5 billion in various passive funds. Xu’s prediction came during an interview at the Reuters 2020 Investment Outlook Summit.

Chinese Mutual Fund Growth

This isn’t the first time that analysts have set aggressive targets for the Chinese mutual fund market. In 2018, UBS analyst Kelvin Chu suggested that China would offer the “single largest growth opportunity” for global managers.

However, UBS said that the industry would require greater cooperation from regulators across the country.

“The opportunity is substantial but it all depends on the progression of reform and deregulation,” said Chu.

Decoupling Threat

Meanwhile, as the U.S. and China continue to work through details of a trade deal, investors are eyeing both markets. Furthermore, Chinese fund manager Richard Pan told Reuters this week that foreign ownership of A-shares in China will top 10% in a decade. That figure would be up from 2.7%, according to the head of international business at China Asset Management.

Related: US Blacklists Chinese AI Organizations Including Leading Startups

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