(China Alert): Balancing good and bad to avoid ugly

– Mutual fund companies’ non-core AUM as a whole grew significantly (now USD2.5tr)
– There were divergences in SA and subsidiary growth
– Balancing these key business lines in 2H16 will dictate competitiveness in 2017 and beyond

Update: Building pressure from all sides is forcing mutual fund companies and their subsidiaries to reevaluate their AUM structures to capture institutional demand and taper more risky operations. This can be seen in the divergence of segregated account (SA) and subsidiary AUM growth in the second quarter: SA AUM surged while, in many cases, subsidiary AUM growth slowed to a trickle or even declined. Firms are now at a crossroads as they balance regulatory changes and new demand, especially from institutions.

While some FMCs seem to have their blinders on, others are maneuvering to cater to …

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