China’s Active Funds Beat out Passive Funds in First Three Quarters of 2021

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Active funds in China have beaten out passive funds since the start of 2021 amidst volatile market conditions.

In the first three quarters of 2021 active equity funds (including 673 active share funds and 5634 mixed funds) posted an average return of 6.48%, according to data from Jinniu Wealth Management Net (金牛理财网).

Over 200 publicly offered funds posted returns of more than 30%, including 53 with returns of over 50%, 22 with returns of over 60% and 14 with returns of more than 70%.

By comparison the average rate of return for 1215 indexed funds in the first three quarters of 2021 was 4.93%, while for 4035 bond funds it was 3.42%.

The average return for 696 money market funds was 1.69%, and for 331 qualified domestic institutional investor (QDII) funds it was 4.81%.

“Since the start of this year, foundational markets such as stocks markets and bond markets have seen considerable fluctuations and intenser divergence,” said Ma Yongan (马永谙), founder and chief finance analyst at Licai Mofang, to state-owned media.

“In such a complex and variable market environment, the rate of return for active funds has exceeded passive index funds, embodying the specialist investment capability of these funds.”

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