GUANGZHOU (Fund China) - Up to the end of 2007, the overall management asset of the top 10 managements takes 49.8% of the whole fund industry’s amount. Such a high centralization clearly mirrors the China domestic fund industry’s present pattern.

However, over the past three years, the top 10 fund managements’ market share has reduced from 58.3% in2005 to 49.87% in 2007 showing the high centralization is changing day by day. And the second-tier fund management’s rise is the main power for this shifting.

The rapid rise of second-tier companies

Different types of annual ranking reports released one after the other last week. And a group of second-tier fund managements’ investment ability ranking moves up highly averagely in 2007 such as Changxin Asset Management, BOC International Investment Managers and AIG-Huatai Fund Management. Changxin income-increasing dynamic strategic fund was ranked top 1 among the active allocation funds. The performance of the second-tier fund managements is improved rapidly as well as the fund scale. The small & medium scale fund managements averagely rose more than 400% last year.

A flash in the pan or a beginning

Some insiders said from the investment philosophy and theme point of view, the second-tier fund managements is not far from the top group significantly. It is known that the performance of the second tier fund managements is not a compelling show, it is the first step for its challenge to fund industry pattern formed by the top 10 fund managements. The second-tier fund managements will be a crucial force boosting the market competition in the A share market’s long term bullish backdrop.

Copyright Fund China 2008.

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