(China Alert) QDII and MRF: Out with old, in with the new
- FMC, JV, MRF, QDII
Update: Two JV FMCs – Manulife Teda and Fortune SG – each liquidated a QDII fund last week, an industry first. Z-Ben Advisors believes they will not be the last: some QDII funds have been an Achilles’ heel for their domestic managers for years. As mass retail investor demand instigates a structural change, we believe FMC QDII funds will continue to be liquidated and replaced by better-managed MRF funds. However, this change won’t be seamless and foreign manager entry strategy has become more important. Initial MRF participants will be faced with launch windows that are peppered with challenges such as end-of-year window dressing, risk-off mainland investors and Chinese New Year. Timing is critical.
The liquidated Manulife Teda and Fortune SG QDII funds had AUM of RMB7m (global equity) and RMB5m (developed market equity) respectively. It has been clear to us for years that they were dead funds walking, however, there are currently……
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