Diverging Profits Show How Size Matters for China’s Mutual Fund Firms
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Profitability among China’s mutual fund managers has continued to diverge, as larger players better equipped to navigate regulators’ sweeping fee cuts reported strong performance, in stark contrast to smaller rivals.
While industry leaders saw net profit jump as much as 17% in 2024, their small and midsize counterparts reported declines of up to 42%, according to Caixin’s analysis of recent stock exchange filings.
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- Industry leaders experienced a net profit increase of up to 17% in 2024, while small and midsize counterparts saw declines reaching 42%.
- Major mutual fund managers, such as E Fund Management, posted strong profits, with E Fund leading at 3.9 billion yuan, amidst varying performances in the sector.
- Regulatory fee reforms by the CSRC led to a 6.5% drop in management fees for top firms and projected increased competition, with a 10% growth in total mutual fund assets to 32 trillion yuan.
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What Happened When
- July 2023：
- The China Securities Regulatory Commission (CSRC) revealed a plan to reform the sector's fee structure, impacting fund managers.
- Year 2024：
- Several major mutual fund managers, including E Fund Management Co. Ltd. and China Southern Asset Management Co. Ltd., reported robust net profit growth, with gains as high as 17%, while small and midsize fund managers, such as Bank of Communications Schroder Fund Management Co. Ltd., reported declines in net profit up to 42%.
- By the end of February 2025：
- The total assets under management by China's mutual fund industry grew to approximately 32 trillion yuan, marking a 10% year-on-year increase.
AI generated, for reference only
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