GUANGZHOU (Fund China) - There are ten indicators in the fund’s development in the near future as followed:

The fund scale’s stable increase

The total fund scale amount will be 20 trillion more or less in 2020 in a neutrally forecast and the following 13 years’ compound annual growth rate will reach 16%.

The fund structure will be more ideal

In a long views, the stock funds will keep steady-going in 50% of the market proportion accompanied by the mixed fund declines to the range level from 20% to 30% and bond funds and currency funds hold 20% to 30% proportion. Meanwhile, the passively managed mutual fund will develope rapidly and overrun the actively-managed funds.

The increase in fund scale sparked by 3 parts

The increase of the fund is contributed by the un-allocated yield of the old funds (50%), the continual sales of the old funds (30%) and the new funds issue (20%)

The public funds and the Private Financing progress parallelly

In a mature fund market, the pulic funds and the institution financing services are the main fundament for a fund management to survive. In other words, the Private Financing service will be hotly embraced by the international capital management industry in the near future, it is also a general direction for Chinese fund industry development.

The first step for the global fund development: QDII

The China’s fund development will integrate into the global fund evolution boosted by the capital liberalization and internationalization. And the fund holders and speculators will be more-rational in fund invest incentive, possessing cycle, variety election, performance and net-value selection and handle freight calculation.

An important capital source needed arosing concern, pension fund

The China’s corportations’ annuity amount is 120 billion at present with the state social security fund 400 billion more or less. And it is predicted to be more than 1 trillion RMB in 2010 and will reach 15 trillion RMB in 2030 by WB( world bank). If calculated with annual yield from 4% to 5%, then the social security should at least maintain in or above 0.2 trillion in order to balance the same year’s social security demand.

The competition and revolution between the managements

The fund industry high convergence is intense day by day, and the differentiation among managements will be deeply obvious. And there will be some revolutions like the appear of diversification forms of ownership oragnization and the realization of own operation diversity, the promotion of outsource operation and the new extention style merger and acquisition.

Fund handle fee turns lower and lower

The commission charges like manage fee and trustee fee will be lower and lower due to the market competition, scale economy and the fund’s control releasing.

The multi-channel market promotion in commercial bank leading

The commercial bank is the main marketing channel for fund distribution accompanied with two supplement channels securities firms and fund managements. The online trading is another channel that is intangible and can not be neglected. There are some expert sales company and consultor company but needed time for its development.

Copyright Fund China 2008.

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