Chinese banks overwhelming dominate capital sources for domestic fund companies, yet are reaping only modest returns on these entrusted investments.
The latest figures released by the Asset Management Association of China indicate that Chinese banks had made entrusted investments of 9.15 trillion yuan (USD$1.33 trillion) via asset fund companies and their subsidiaries by the end of 2016.
According to the “Securities and Futures Business Institution Private Asset Management Operations 2016 Annual Statistical Report,” fund companies focused heavily on the expansion of entrusted investments made by banks last year.
The reports figures indicate that investment from banks accounted for 58.1% of capital sources for fund company special accounts, and 63.1% for their subsidiaries.
In terms of returns, however, fund company special account products provided average returns of only 2.3%.
QDII products provided the highest average returns at 3.2%, while the figure for securities products was 1.7%.
Entrusted investments made by Chinese banks last year actually surpass these figures, however, given that AMAC’s data does not include the customised public fund products of banks.