Mutual Fund in China
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- Date Submitted: 01/29/2010 01:35 AM
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Mutual fund industry
Mutual fund first appeared in China in 1991 and experienced explosive growth following years. Generally, the market was dominated by open-end funds and mainly invested on stock fund, hybrid fund and money fund. Top 10 biggest companies account 50.44% market share as of Dec.31, 2008. Above 99% accounts are opened by individual investors. Investors mainly purchase funds from three distribution channel including banks, which are dominant channel, brokerage firms and mutual fund companies. Industry was highly impacted by global financial crisis in 2008, investment return declined rapidly to negative mostly due to recession on stock market.
Typical Strategy
In recent years, a growing number of companies have begun to focus on the role of marketing such like industry leader, CUAM, which focuses on “long-term investment and sustainable high return”, and AEGON INDUSTRIAL, which claims that the economic responsibility is the foundation of social responsibility foundation. All of these campaigns are engaged in building up a vivid brand image, providing high value-added service to its target customer group and therefore improving market share.
Firm T
Firm T is relatively new fund company which was established less than 6 years ago. The firm is known for its prudent and growth-oriented style with a good risk-control system. All of its stock funds for more than two years have received four-star or five-star rankings from Morningstar. From the table below, we see that Firm T’s customers are interested in long-term rather than short-term investments, reflecting this core competency of the firm. In addition, Firm T’s customers hold a great deal more trust for Firm T than investors in the general industry hold for other firms, further reflecting the firm’s established track record for successful long term investments.
Table 1: Customer Investment Motivation (see Appendix 4 p 22)
| |General...
Mutual fund first appeared in China in 1991 and experienced explosive growth following years. Generally, the market was dominated by open-end funds and mainly invested on stock fund, hybrid fund and money fund. Top 10 biggest companies account 50.44% market share as of Dec.31, 2008. Above 99% accounts are opened by individual investors. Investors mainly purchase funds from three distribution channel including banks, which are dominant channel, brokerage firms and mutual fund companies. Industry was highly impacted by global financial crisis in 2008, investment return declined rapidly to negative mostly due to recession on stock market.
Typical Strategy
In recent years, a growing number of companies have begun to focus on the role of marketing such like industry leader, CUAM, which focuses on “long-term investment and sustainable high return”, and AEGON INDUSTRIAL, which claims that the economic responsibility is the foundation of social responsibility foundation. All of these campaigns are engaged in building up a vivid brand image, providing high value-added service to its target customer group and therefore improving market share.
Firm T
Firm T is relatively new fund company which was established less than 6 years ago. The firm is known for its prudent and growth-oriented style with a good risk-control system. All of its stock funds for more than two years have received four-star or five-star rankings from Morningstar. From the table below, we see that Firm T’s customers are interested in long-term rather than short-term investments, reflecting this core competency of the firm. In addition, Firm T’s customers hold a great deal more trust for Firm T than investors in the general industry hold for other firms, further reflecting the firm’s established track record for successful long term investments.
Table 1: Customer Investment Motivation (see Appendix 4 p 22)
| |General...