(China Alert) MRF***ED

• MRF fundraising so far has been worse than lackluster
• Z-Ben Advisors’ experience shopping for MRF funds suggests some reasons why
• Outsourcing distribution is, so far, a big negative for sales and customer service

Update: Z-Ben Advisors has been shopping for MRF funds and, we have to say, it wasn’t easy. These funds were hard to find both at bank counters and on mobile phone apps, marketing materials were largely non-existent and we found some potentially troubling gaps in compliance in their sales processes. And we were shopping in Shanghai, China’s financial capital, not some second-tier city. The program has had a disappointing start as evidenced by the RMB40m raised by JP Morgan’s and Zeal’s MRF funds in aggregate by the end of January. However, what needs to be stressed is that the bank QDII program started off in the same way. MRF appears to be facing many of the same hurdles that QDII once did. The results of Z-Ben’s ongoing research efforts in this area will be summarized in a more detailed and definitive strategic guide in June. For now, we will highlight some of our major concerns about current MRF sales practices.

MRF participants have a great opportunity to…

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