China seems to defy the economic rules that apply to the rest of the world. The country saw its output stumble briefly a year ago, but aggressive stimulus by Beijing has pushed the growth rate back up to about 8 percent. That dynamism whets the appetites of investors and fund managers alike.
Turning economic growth into investment gains is no simple matter, though. China’s stock market has been notoriously volatile, falling by more than two thirds from its October 2007 peak before recovering somewhat this year. The impact on fund managers has been dramatic. Assets under management in the China 20, Institutional Investor’s annual ranking of the country’s largest money managers, fell by 27.2 percent last year.
II’s Asia Bureau Chief, Allen T. Cheng, reports that fund managers are responding to the pressures by launching new funds that are less exposed to equities and by adopting cyclical investing strategies common in developed markets. Foreign fund managers also continue to make inroads, lured by the country’s fast-growing wealth. China’s economy may be like no other, but its nascent asset management industry is looking more and more like those in the West.
See related story, “China’s Top Fund Managers Stay the Course”.
Click here to see the China 20 rankings.
