2007 funds investment may be gaining like winning in the bet.

The closed-end fund index in Shanghai and Shenzhen stock markets has gained a excellent performance of more than 140% two-year accumulated grwoth.

There are 78 open-end funds that the annual accumulated net value is higher than 100% and 31 funds’ accumulated net value is above 4 yuan and nearly 90 funds’ accumulated net vaule is maitain in 3 yuan.

However, Zhang Jie, a senior analyst at China Everbright Securities said, after a two year contiunal rising in 2006, and 2007, the security market’s yield is likely to decreased significantly, and the fluctuations and frequency of the stock index may be further increased.

Investors with poor risk bearing capacity may follow the policy orientation and switch to the low-income investments,bond-type varieties which will receive its upcoming large-scale development recently.

The show of the cloesd-end fund

Data showed that there are 8 closed-end funds with annual net value rise up 90% among the 34 funds, along with some other varieties whose net value growth is only above 50%. Additionly, there are 29 closed-end funds rise 50% comparred to the earlier of this year. (excluding rights). In other words, even if it does not calculate dividends, there is a considerable price differences in the second market.

Zhang Jie indicated that the existing 32 old closed-end funds’ outflow is over 60 billion yuan even taking the fourth quarter net income out of consideration, and the considerable dividends expectation will continue to stimulate the capital injection.

Although the open-end fund has saved the fourth quarter of 2007 damaged “reputation.” , only about 9 Funds achieve a net value growth from 0-7 percent reference to big board net value at the historical high of 6124 points.

This shows that most of the open-end funds’ gainning period is in the previous three quarters of 2007, the fourth quarter overall revenue is not satisfactory.

Actions of the new varieties are mixed

Zhang Jie said that the market will continue to renew the 2007 Variety innovation, policy guidance and yield diversification this year.

The new funds are basically the bond fund, although the China Securities Regulatory Commission re-release the strict approve of the new fund and the equity funds ara stay in the period of switching from the “closed-end to the open-end” which reflected the CSRC continued to provide investment channels,but also deliberately suppressed the blindly following or emotional or speculative investment.

The innovative closed-end funds listed less than half a year, has steped out of the premium transactions,but also sparked the the purchase of the closed-end funds.

It is noteworthy that, the QDII equity fund’s overheating issue and the temporary loss by false operation triggered a discussion of such products’ future development.

Zhang Jie said, Currently, there is a big gap between the domestic and the foreign fund managers’ ability and the single variety’s scale.

The QDII funds’ short term yield this year is constraints whether by the global economy or by the listed timing.

The stress from the outside

Since the 2008 overall economic policy has been decided to be “prudent fiscal policy and tight monetary policy”, the stock mareket will still be concerned about short-term inflation this year(at least half a year)

Zhang Jie said ,the continue to raised the bank deposit reserve or interest rate is reasonable, it is the fluctuations and frequency not decided yet. Investors should be concerned about the issue of new fund, and know of the expansion or contraction of the fund supply from the old funds marketing style changes

In addition, a large number of red-chip queuing return and a large number of restricted stock release in the second half will continue to lifting a tremendous expansion pressure to the stock market.

Comprehensive judgement, this year’s stock market will not continue the past two years’ unilateral upward trend. The Radical investors can still look forward to and invest in ETF of the small and medium-sized board, or biased towards resource, and consumption fund varieties.

Copyright Fund China 2008.

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