China’s ‘Fixed-Income Plus’ Funds Hit by Redemptions on Profit-Taking
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China’s “fixed-income plus” mutual funds are facing mounting redemptions as geopolitical tensions and equity market volatility prompt investors to lock in gains.
The strain is highlighting vulnerabilities in a multitrillion-yuan segment that grew quickly as investors sought higher yields amid falling deposit rates.
Funds saw continuous net outflows in the week of March 16-20, with March 20 marking the largest redemption since the second half of last year, according to Huachuang Securities. Most fixed-income plus funds posted losses that day as the benchmark Shanghai Composite Index fell below 4,000.
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- China's "fixed-income plus" mutual funds are experiencing significant redemptions due to geopolitical tensions and stock market volatility.
- On March 20, 2025, redemption volumes reached their highest since mid-2024, with the 133 worst-performing funds losing 1.5% in a day.
- These funds, with roughly 13.9% equity exposure, are vulnerable to market swings, highlighting risks for institutions seeking capital stability.
- Huachuang Securities
- Huachuang Securities reported continuous net outflows from China's "fixed-income plus" mutual funds during the week of March 16-20. March 20 saw the largest redemption since the second half of last year, with most of these funds experiencing losses on that day.
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