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Bloomberg News August 27, 2021

  •  Fund unit and wealth venture are set to launch first products
  •  U.S. giant has yet to win over local investors after 15 years

BlackRock Inc. is gearing up for the first test of Chinese investor appetite for its own mutual fund products, more than 15 years after entering the world’s most promising wealth market.

The company’s new China unit is launching its debut product on Aug. 30, just two months after winning regulatory approval to become the nation’s first wholly foreign-owned mutual fund firm. Its wealth management joint venture with China Construction Bank Corp. and Singapore’s Temasek also said earlier it obtained permission to start a quant equities offering “in the near term.”

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The world’s largest money manager is leading a global foray into China’s 100 trillion yuan ($15.4 trillion) asset management industry after regulators eased curbs on foreign control last year. It faces a challenge appealing to yield-hungry Chinese retail investors in a crowded market that’s dominated by local firms, even as surging demand provides a promising entry point. 

“Fund launches are rising steadily and have stayed at high levels” in recent months, said Sun Guiping, an analyst at Shanghai Securities Co. “BlackRock’s first fund is coming right in time to catch a big wave of launches in the second half of the year.” 

New mutual funds have raised more than 2 trillion yuan this year through Aug. 18, already the second-highest annual amount ever, only trailing last year’s record 3.1 trillion yuan. The total includes 19 products that netted more than 10 billion yuan in their initial launch.