(China Alert) The last bastion of fee-rich funds
-China appears to have ignored the global fee squeeze
-High costs aren’t much of a consideration for investors, so long as they get a positive return
-This raises questions as to how foreign ETF managers will compete onshore
Update: Global asset management is facing a price war amid a lack of interest in actively-managed funds. This isn’t the case in China as active management continues to reign supreme. Z-Ben Advisors doesn’t believe that this will change in the foreseeable future as China remains the only market where rich fees are still acceptable; where else can an MMF charge 33bps? This means that foreign managers could have to assess their business strategy when coming onshore: China won’t conform to a cookie cutter approach.
Z-Ben Advisors believes that if Vanguard were to come onshore tomorrow with its current strategy, it would struggle. This is why: …
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