Equity funds post first decline in June
By Jin Jing (China Daily)Updated: 2007-07-04 08:49
Due to the recent downturn in the stock market, Chinese equity funds have posted their first monthly decline in combined assets since last July.
With a fall of 0.43 percent in June, equity funds managed by professionals can still claim to outperform the CSI300 Index, which fell a total of 4.2 percent in the same month.
The CSI Index includes most of the big-cap stocks, which are also favorites of fund managers.
"The resilient performance of equity funds shows that most of them have a more risk-prevention stock portfolio," said Zhou Liang, China research manager at Lipper.
Except for equity funds, all other mutual fund classifications showed increased assets in June. Mixed-asset aggressive funds rose 1.77 percent, followed by mixed-asset balance funds, up 0.87 percent, while mixed-asset flexible funds increased 0.44 percent, according to statistics from Lipper, which tracks the performance of mutual funds.
"From my experiences in other markets, mutual funds usually outperform the stock index when the stock market is volatile or down," said Lou Jing, an analyst at Haitong Securities.
"This is because most mutual funds are invested in stocks of large and well-managed companies, which are more resistant to market fluctuations," she said.
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"Mutual funds have become a major player in the stock market," said Hu Lifeng, chief analyst at China Galaxy Securities.
Among all the equity funds, the index funds performed best, with combined assets jumping 73.37 percent in the first half this year, far more than the 40 percent rise in the Shanghai Composite Index.
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