Fund performance

Open-end funds

All China open-end fund categories in August again recorded gains. The Equity, Mixed-Asset Aggressive, Mixed-Asset Flexible, and Mixed-Asset Balanced fund categories chalked up gains of 16.97 percent, 14.98 percent, 13.99 percent, and 12.90 percent, respectively. The accumulated return of Equity China funds in the last 12 months reached 253.17 percent.

The Chinese fund market has some obvious characteristics, such as the frequent change in portfolio managers and investors' paying special attention to short-term performance. These factors influence the persistence of fund performance in China. Chinese fund investors wonder whether the past top funds can have a good performance in the future.

To answer this question Lipper calculated the performance of Chinese funds in the last 48 months.

The data shows that past performance patterns also persisted. Compared to other periods, the past 12 months' performance continued the most obviously. And the better the past 12 months' performance was, the more the possibility of beating counterparts in the following 12 months.

QFII funds

The 11 QFII funds in our statistics earned in August an average of 16.48 percent, calculated in yuan - a little lower than domestic equity funds, but higher than Mixed-Asset Aggressive funds.

The latest total asset under management of QFII funds was $6.18 billion. Considering the earnings influence, redemptions were a little more than subscriptions. iShare Xinhua/FTSE A50 China suffered redemptions of $400 million. The stock positions of the QFII funds were still stable.

Lipper Fund Market Insight Reports

(China Daily 10/08/2007 page4)