(China Alert) MRF: Success demands coordination

  • MRF
-A significant decrease in MRF flows in September was due in part to a deliberate decision -MRF managers must focus on product rollout strategies and domestic agent choice Update: What a difference a single month can make. Net northbound MRF flows slowed significantly in September, from the RMB4bn a month earlier to September’s RMB560m. What […]
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(China Alert) Pension reform: License and registration please

-Regulators updated pension reform progress during their Q3 press conference -Z-Ben Advisors expects the first round of pension mandates to be issued this year -License reform will be key to global managers targeting a slice of the assets Update: Managers can now almost taste the Chinese pension mandates as regulators make significant progress towards reforms […]
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(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. […]
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(China Alert) Fixed income: Stronger bonds

  • CIBM
-The number of foreign investors and AUM in RMB credit saw a marked increase in September -Chinese regulators have given early stage tax clarity for the CIBM -Tax treatment across all the inbound programs is now similar Update: As the RMB enters the IMF’s special drawing rights (SDR) basket this month, more adjustments are being […]
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(China Alert) Should I stay or should I go

-Global players are reassessing their JV brokerages -We expect firms to follow divergent strategies regarding ownership onshore Update: JP Morgan’s joint venture (JV) partner, First Capital Securities, has announced the two are in talks to transfer the American banking giant’s stake. Such an exit may trigger a broader industry shakeup; this would be right on […]
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(China Alert) The dawn of multi-asset solutions

  • FOF
-This is a relatively new concept in China but recent guidelines are changing this -Products will be able to target Chinese institutional capital -Foreign firms could build on global product design expertise Update: Multi-asset solutions are ubiquitous globally, yet are relatively unseen in China. Until now. As a result of new fund of fund (FoF) […]
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(China Alert) Shanghai FTZ: Setting the stage for substance

  • FTZ
-The first stage of FTZ development had a three year timeline -So far, reform initiatives have given the cold shoulder to financial services -We believe it will form the cornerstone of the next agenda Update: Z-Ben Advisors would like to wish the Shanghai Free Trade Zone (FTZ) a happy third birthday. This is actually an […]
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(China Alert) King of the MRF mountain

  • MRF
-Northbound inflows for MRF quadrupled in August -New entrants continue to stumble -The MRF rulebook is taking shape as distinct from QDII Update: MRF flows are being dominated by one firm – JP Morgan Asset Management. Just released data for August show nearly RMB4bn (USD600m) of inflows for the program. By Z-Ben Advisors’ calculations, the […]
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(China Alert) QDII: A debatable topic

  • QDII
-In a quota-scarce environment, firms are tapping demand in different ways -Opportunity remains for global managers, if currently limited Update: It has been a long old while since we’ve written an update on the QDII program, mainly because there hasn’t exactly been much to report. And it’s not like anyone, ourselves included, is anything but […]
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(China Alert) Chinese CDS: The default option

  • bond, default
-China’s credit markets are set to introduce more diversified risk management tools -This is a necessary function of a maturing bond market -Provisions for foreign managers should soon be clarified Update: A new set of tools to manage credit risk is being launched in China: today the National Association of Financial Market Institutional Investors (NAFMII) […]
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