China’s Open-ended Mutual Funds Market Takes First Place in Asia at $2.81 Trillion, Fifth Place Globally

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China’s open-ended mutual funds market has emerged as the largest in the Asia-Pacific following a sharp rise in the popularity of the investment vehicles.

The open-ended mutual funds market in China reached USD$2.81 trillion in 2020 according to a new report from US-based- Investment Company Institute (ICI).

The figure puts China ahead of Japan and Australia for the first time to make it the Asia-Pacific’s largest open-ended mutual funds market.

As of the end of 2020 the global open-ended funds market totalled $63.1 trillion, for an increase of $8.2 trillion compared to 2019.

The US market accounted for nearly half at $29.3 trillion, while Europe came in second at $21.8 trillion, and the Asia-Pacific in third place at $8.8 trillion.

The top ten nations in terms of open-ended funds markets were the US, Luxembourg, Ireland, Germany, China, France, Australia, Japan, the UK and Canada.

The 2020 list marks the first time that China’s open-ended mutual fund market has surpassed that of Australia and Japan to be the Asia-Pacific’s largest.

Open-ended funds have become increasingly popular in China in recent years, with more than 3 trillion yuan in new shares issued in 2020 for a record-breaking high, and 1.2 trillion yuan issued since the start of 2021.

Dou Yuming (窦玉明), chair of Zo Fund (中欧基金), said that publicly offered mutual funds would continue to see rapid growth in China due to the broader rise of the retail wealth management market, the acceleration of reforms to the Chinese pension system, as well as ongoing reforms of China’s capital markets.

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