Excel Funds Management Inc.

Emerging Markets

China Asset Managers Report

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Since ancient times, the Chinese have referred to their country as “Zhong Guo,” Mandarin for “Middle Kingdom.” Today, the meaning is quite appropriate, as turmoil in Europe and anemic growth forecasts for other developed markets leave many looking to China as the world’s central growth engine.

Yet, after a roaring start in the first decade of the millennia, the Chinese asset management industry has seen its growth stall, even as the local banking sector mostly avoided the issues that plagued developed markets during the financial crisis. While GDP growth has continued to grow at 8% in recent years, funds under management today remain some 30% below 2007 levels. At the same time, the number of funds has almost tripled, and no fewer than 71 fund management companies are competing fiercely for investors, many of whom prove quite fickle. Meanwhile, declining capital markets have reduced asset values, further straining the profitability of managed assets. Citi is proud to partner with Z-Ben Advisors, an independent consultant, in closely examining the unique features of the Chinese asset management landscape and its prospects in coming years. Based in Shanghai, Z-Ben is focused solely on producing research on China, and as such, is well placed to explore the finer points of the local market.

Key findings of Z-Ben’s research show that while China’s asset management industry has taken a brief pause in terms of mutual fund growth, other sectors have flowered. Assets in private funds have tripled in less than two years’ time; monthly launches of short-term-oriented bank wealth management products number in the thousands; and on the institutional side, sovereign and retirement funds are growing with breakneck speed. The future of asset management in China remains bright, Z-Ben notes, as the shift toward a financial industry more reminiscent of developed markets is under way. The pension and insurance sectors offer tremendous promise, given the need to rise to the challenge of providing for an aging population. Continued liberalization has increased the size and number of opportunities available to domestic and foreign players, as witnessed by the recent expansion of the Qualified Foreign Institutional Investor (QFII) program. The long-term prospects of China are almost universally extolled, even if challenges remain in the short run. As a major provider of services to the investment community, by sponsoring this research Citi hopes to provide industry participants with fresh insights, making a complex market easier to navigate.

Want to read more? Click here: China Asset Managers Report Citi Sept 2012


Author: Excel Funds Management

We Are Leaders. Our Focus is Undivided. Excel Funds is Canada’s specialist in Emerging Market investment opportunities. We pioneered Emerging Market mutual fund design and distribution in Canada. Our focus is undivided – Emerging Markets is all we do. Our Mission Is To Offer Canadians True Global Access By offering Canadians access to rapid growth markets, Excel Funds provides truly global and diverse investment value. Our clients want consistent, responsible and intelligent solutions – we will never stop being challenged and deliver on client expectations. We Listen. We Are Determined To Deliver. Our clients want to understand better. Excel Funds is the only company dedicated to providing investors with actively managed, best-in-class Portfolio Managers based in regional markets. In order to deliver deeper understanding, we are not removed from unique cultural, political and economic experiences. We Initiate. We Create. Investors benefit from strong, sustainable growth. To create wealth for our clients we will: • Offer globally diverse opportunities to capture shifts in world economies • Not resist change and continually lead in Emerging Markets global growth • Engage world class institutional managers for retail investors We Are Passionate. We Will Never Stop Innovating. True leadership is enabling and seeks a positive outcome for all invested. We will not rest on past success, and continue to provide clients with: • Innovative fund structures • Canada’s largest & most comprehensive Emerging Markets products • The best institutional level Portfolio Managers • World class on-the-ground active managers • A singular focus on Emerging Markets, the driver of global growth

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