Generally speaking, it's hard for trading funds to maintain relatively high yield ratios but most investors are enjoying steady returns from their fund investments now.
Ms. Ren is a fund investor. At the beginning of 2007, the young lady bought three funds. Being a stock investor at the same time, Ms. Ren preferred equity funds and she had kept her investment in the stock market.
As the stock index became volatile last year, Ren's investment was affected. Her stock investment appreciated more than 50 percent before May 30, the day when the government announced that stamp duty rose from 1¡ë to 3%, after which over 900 stocks suffered. After that day, her investment portfolio shrank.
Her fund investment, however, experienced a different story in the past year. Before May 30, the return ratio of her fund investment was on average 30 percent. But it kept on increasing after her stocks suffered.
At the year end, when Ms. Ren reviewed her investment in 2007, she surprisingly found that the average profit ratio for her fund investment was about 122.78 percent, while the ratio for her stock investment was only 33.28 percent.
According to statistics, over 100 million Chinese people opened their fund accounts by the end of 2007. The number was only 10 million before 2007. It shows that one in four Chinese families now have their own fund investment accounts. In last October, the asset of China's fund industry increased to three trillion yuan.
How will the fund industry develop in 2008?
The scope of the industry will be steadily expanded.
As China's economy has been growing rapidly, the Chinese people's awareness of money management has been highly raised. In the way, we can deduce that more and more people would like to transfer their bank savings to fund investment in the near future. However, on the other hand, if the speed of development of the fund industry has exceeded that of listed companies, a so-called "Blue Chip Bubble" will be generated, which will affect the healthy development of China's capital market. This way, the government will likely take some measures to limit the unreasonable development of the fund industry.
A steady growth rate
In 2007, the highest return ratio for some fund reached 200 percent. This year, it will be hard for them to maintain such a high return ratio, even though there will be many favorable factors such as the 2008 Olympic Games. The volatility of the international financial market will also affect the performance of funds. In this regard, the fund industry will probably maintain a steady growth rate in 2008.
The achievements of fund companies will differ
China's fund companies are still immature. Their performances are not steady enough. Some gained return ratio of 100% to 150% last year. But for some ordinary companies, the ratio was only 50%. It's estimated that, in 2008, the gap between excellent-performance funds and ordinary ones will become even larger.
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