China Fund News Wu Juanjuan
A few days ago, the Investment Company Institute (ICI) released data on its official website showing that by the end of 2022, the asset size of global regulated open-end funds excluding funds of funds (FOF) increased by 7.1% from the end of the third quarter of 2022, reaching 60.15 trillion US dollars, equivalent to 413.55 trillion yuan. Net inflows to regulated open-end funds worldwide (excluding FOF) amounted to $123 billion in the fourth quarter, a significant improvement from a net outflow of $39 billion in the third quarter. As of the end of the fourth quarter of 2022, China's regulated open-end public funds reached US$3.27 trillion, continuing to hold the fourth place in the world.
Let's take a look.
Excluding FOF, the global regulated open-end public fund is 413.55 trillion yuan
ICI compiles data on regulated open-ended funds on behalf of the International Investment Funds Association, an association of fund industry associations around the world. Fund data as of the end of 2022 comes from 46 administrative regions around the world. In terms of statistical caliber, the regulated open-end funds in the ICI statistics are equivalent to open-end public funds in the mainland.
Worldwide Assets of Regulated Open-End Funds
Trillions of US dollars, end of quarter
Global regulated open-end fund size data since 2021. Source: ICI
It is worth noting that due to the depreciation of the US dollar compared to the currencies of many regions in the fourth quarter, the size of funds in these regions increased when it was denominated in US dollars. For example, the dollar depreciated significantly against the euro in the fourth quarter, with European fund assets increasing by 10.4% in dollar terms, but only 0.9% in euro terms.
As you can see in the chart above, the EURUSD rebounded after falling below 1.00 in Q3 2022. In the fourth quarter of 2022, the euro recorded a significant appreciation against the US dollar.
Let's take a look at the distribution of these $60.25 trillion regulated open-ended mutual funds.
According to the caliber of ICI, if all regulated open-end public funds are divided into long-term funds and money market funds, the total size of long-term funds is 51.29 trillion US dollars, and the total size of money market funds is about 8.86 trillion US dollars.
Within the long-term fund, the total size of equity funds is 26.95 trillion US dollars; the total size of bond funds is 11.55 trillion US dollars; the total size of balanced (hybrid) funds is about 7.09 trillion US dollars; guaranteed income, real estate and other types occupy the remaining size of long-term funds.
In short, equity funds account for more than half of the size of long-term funds.
At the end of 2022, the global ETF size was $8.94 trillion, which is comparable to the total size of the cargo base ($8.86 trillion).
In the fourth quarter, in dollar terms, equity fund assets increased by 8.8%, bond funds by 2.6%, balanced or hybrid funds by 7.7%, and money market funds by 6.7% in dollar terms.
Worldwide Long-Term and Money Market Net Sales
Billions of US dollars
In absolute terms, in the fourth quarter of 2022, net sales of money market funds were US$332 billion, the highest quarterly net sales of money market funds since 2021.
By region, the Americas contributed 53% of global regulated OFCs, Europe 32% of GAOs, and Africa and Asia Pacific 15% of global ROCs.
China holds the fourth place in the world
Tabulated according to ICI data
As of the end of the fourth quarter of 2022, China's regulated open-end public funds were US$3.27 trillion, ranking fourth in the world. As of the end of the fourth quarter of 2022, the top 10 regulated public funds in the world were the United States, Luxembourg, Ireland, China, Germany, Australia, France, Japan, the United Kingdom and Canada.
Among them, the United States ranked first with a regulated open-end public fund size of $28.59 trillion, Luxembourg ranked second, a regulated open-ended public fund size of $5.36 trillion, and a tenth Canadian regulated open-ended public fund with a $1.59 trillion. In the Asia-Pacific region, China, Australia and Japan are among the top ten in the world, of which China is the first in the Asia-Pacific region.
If the time is extended, China's public fund ranking has caught up from the ninth in the world at the end of 2016, surpassing Japan, Australia, the United Kingdom and other countries to rise to the fourth place now. As of the end of the fourth quarter of 2022, the size of China's regulated open-ended public funds was US$632.9 billion less than the third place, and the gap was widened from US$274.887 billion at the end of the third quarter. This was mainly due to net redemptions of Chinese public funds in the fourth quarter, while most of the world's top 10 regulated open-end public funds were net sales.
The data shows that among the top ten countries by total size, China and the United Kingdom suffered net redemptions in the fourth quarter. Among them, China net redemption was $105.369 billion and the United Kingdom net redemption was $4.349 billion.
Tabulated according to ICI data
As of now, Australian net subscription data is not available. The remaining countries were net subscriptions during the period.
However, despite the net redemption in the fourth quarter, China ranked first in the world in net sales in the third quarter. The top ten markets for net sales in the third quarter were China, Japan, Switzerland, India, South Korea, Mexico, Turkey, Argentina, Spain and South Africa. This is the second consecutive champion in China after ranking first in net sales in the second quarter.
Top 10 net sales in the third quarter of 2022, source: compiled according to ICI data
In the third quarter, net sales in China were US$71.856 billion, net sales in Japan were US$41.23 billion, and net sales in Switzerland were US$6.597 billion. Four of the top five net inflows came from Asia, namely China, Japan, India and South Korea.
Chinese ETFs rank sixth in the world
Let's look at some breakdowns.
According to data from ICI, as of the end of the fourth quarter of 2022, China's ETF ranked sixth in the world with $234.8 billion, the fifth Canadian ETF with $251 billion, Luxembourg at $298.9 billion, Japan at $451.2 billion, Ireland at $912.1 billion, and the United States at $6.48 trillion.
Tabulated according to ICI data
In addition, outside of China, there are many markets that show the characteristics of small total size but a large number of funds.
Tabulated according to ICI data
For example, by the end of 2022, there were 17,000 regulated open-end public funds in Brazil, but the total size was only US$1.40 trillion, and South Korea's regulated open-end public funds were 13,500, but the total size was only US$624.187 billion.
The mainland public fund stood at another 27 trillion yuan
Entering 2023, public funds are showing signs of recovery.
According to data from the Asset Management Association of China, as of the end of January 2023, there were 142 mutual fund management companies in mainland China, including 47 foreign-invested fund management companies and 95 domestic-funded fund management companies; There are 13 securities companies or asset management subsidiaries of securities companies and 1 insurance asset management company that have obtained public fund management qualifications. The total net asset value of public funds managed by the above institutions is 27.25 trillion yuan.