GUANGZHOU (Fund China) – Last week, the stock market turned to move stably after the big sell-off. The equity funds were all out. But the active funds dropped lower than the Big Cap, particularly, those that reduced the share holding position previously showing a defensive ability advantage.

Active fund win

According to the statistics from Galaxy Securities Research Center, the equity fund weekly net value growth decreased 3.10%, index fund’s weekly net value lost 5.45% fund with heavy weighted in shares dropped 3.28% and the balanced fund declined 2.47%. due to the nearly 1000 points sell-off in stock index market, the index fund lost worst.

When compared with each type of the funds, said WeiHuijun, the analysts of Galaxy Securities Research Center, active fund lost less than the index fund. As one side, decided by the essence of fund diversification, but more for the outstanding advantage showing in the fund foresight operation.

Active Fund, those holding a small share position dropped obviously slightly in the sell-off market condition. And combined with the fourth quarter report 2007,

China International Fund Management, China AMC Growth Fund, Harvest Fund Management, Southern Fund Management, INVESCO Great Wall Fund Management, Fortune SGAM Fund Management, and Guotai Asset Management all reduced their share holding position differently. And those with large holding position cut funds are the main direct beneficiary in this adjustment. That is because one side they avoid the loss in the market systematic risk, the other they can suck a lot of money at the low level rapidly and improve their performance significantly when the market stabilized.

Discount rate of closed-end fund is extending slightly

Due to the fundamental market influence, the closed-end fund at the secondary market encountered a rapid slump. According to Wind information statistics, Hanjing fund moved up 0.47% alone in the 5 trading days. And the initiative fund, The UBS SDIC RUIFU CLASSIFICATION Equity fund due to its Leverage effect, drop 10.26%, the worst losses one

As in secondary market, the closed-end fund’s net drop is larger than its net value decline, the discount rate expanded slightly. 18 closed-end funds’ discount rates moved back to 20% or more among the 34 closed-end funds. Hanxing fund’s discount rate was 27.77% last week, ranking top one following Jingfu fund 25.59% and Toongqian fund 25.21%.

Anxin and Anshun funds has declared for their season dividends firstly last week, though encounter the big sell-off in the stock market which closed-end fund cannot get out of. However, Loujing, the analysts of Haitong Securities said that the dividend market condition will continue, but investors should keep closed attention to the net value variety from now to the dividend release period, if the net value shrinks a lot, the dividend market condition may be killed before born. As the dividend release period centralizes in the end of March and the beginning of April, the net value may shake largely in this period. And investors should concern about the discount rate variety substantially as the discount rate had declined largely in the early period and buy in when the discount rate expended appropriately.

Copyright Fund China 2009.

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