Opportunities within private pension space

China's emerging private pension industry and high-standard opening-up agenda have brought strategic growth opportunities for Bank of Communications Schroder Fund Management Co Ltd, a top executive said.

Ruan Hong, chairwoman of BOCOM Schroders, said the Shanghai-based mutual fund management company enjoys "historic opportunities" in development thanks to the high-quality development and high-standard opening-up of the country's capital market.

As China is expected to deepen high-standard opening-up in the coming years, its fund sector will be able to strengthen its capability of exploring international markets, serving the real economy and facilitating clients' wealth growth, Ruan told China Daily recently.

Established in 2005, BOCOM Schroders has a 65 percent stake held by Bank of Communications, one of China's largest commercial banks by assets, and 30 percent held by British multinational asset manager Schroders. The remaining 5 percent stake is owned by China International Marine Containers (Group) Co Ltd.

To embrace opportunities, Ruan said the company will sharpen its competitiveness in the main business lines of equities, fixed-income and fund of funds while strategically developing its personal pensions and investment advisory activities.

FOF refers to a pooled investment fund that invests in other funds, instead of investing directly in bonds, stocks and other assets.

According to market tracker Wind Info, the asset value of pension target FOFs issued by BOCOM Schroders has reached 16.7 billion yuan ($2.4 billion) as of the end of September, ranking tops among fund managers in the country.

China launched its private pension scheme this year, which allows individuals to buy eligible mutual funds, savings deposits and insurance products through their pension accounts and enjoy tax and fee incentives.

In November, the China Securities Regulatory Commission released its list of qualified mutual funds that investors can invest in via their pension accounts, coupled with relevant regulations.

The list, due to be updated quarterly, contains 129 fund products and includes both of the two pension target funds issued by BOCOM Schroders.

Having continuously increased investment in pension fund management in recent years, BOCOM Schroders will further enrich its system of pension target fund products and properly perform relevant investment management responsibilities, Ruan said.

As a fund management joint venture that has operated in China for 17 years, Ruan said BOCOM Schroders has been one of the industry players that benefit from the country's progress in financial opening-up and business environment improvement.

Ruan said the company has achieved fast and solid development by virtue of the advantages of both its domestic and foreign shareholders. As of the end of September, the company had managed 585.7 billion yuan in mutual funds and has served more than 40 million investors.

Since the first group of fund management joint ventures was founded in China in 2002, restrictions on foreign ownership caps in the fund management sector had been gradually relaxed and were totally removed in 2020.

Up to 45 of the 140 mutual fund management companies across the country were foreign-funded as of the end of September, according to the Asset Management Association of China, the self-regulating body of the industry.

The opening-up process has attracted a great number of leading global asset managers and introduced world-class fund management expertise into the domestic industry, Ruan said, adding that she looks forward to improvements in cross-border finance and investment mechanisms, expansion in the scope of securities available via the stock connect schemes and better regulations that can smooth the introduction of more overseas talent.