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SHANGHAI: China's mutual fund industry nearly quadrupled in 2007 as millions of investors rushed to convert their bank deposits for higher returns in the stock market, state media said on Thursday.
Net assets of China's 363 mutual funds totalled 3.3 trillion yuan (450 billion dollars) by the end of 2007, up from 856.5 billion yuan a year earlier, the China Securities Journal reported, citing data from Galaxy Securities.
A survey conducted late last year showed that 83 percent of 14,800 respondents thought mutual funds were the first choice for wealth management, the report said.
Mutual funds are particularly attractive to Chinese who are eager to profit from the booming stock market, analysts said, adding that with around 16 trillion yuan in bank deposits the trend may well continue.
"People are willing to invest their money, and they've been keen to shift from the low-return bank deposits to mutual funds where experts handle their funds," said Yi Linming, an analyst with Industrial Securities.
"Once they realise investing in mutual funds is more profitable and less risky than buying individual stocks by themselves, they just swarm to funds. It's the herd instinct," said Yi.
China's stock market rose about 97 percent after a volatile 2007 despite a 18 percent decline in the key index in November – its biggest monthly drop since July 1994.
- AFP/so
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