REVENUE of China's mutual funds posted a record high last year, more than quadrupling that in 2006.
The 342 non-Qualified Domestic Institutional Investor mutual fund products generated proceeds of 1.17 trillion yuan (US$167 billion) in 2007, compared with 270.9 billion yuan a year earlier, according to fiscal reports by 58 mutual fund companies released yesterday.
The four products under the QDII scheme posted a loss of 10.4 billion yuan last year, blamed on negative influence of the United States subprime mortgage crisis and the slower global economic growth.
"A bullish stock market and rapid expansion of account owners last year led to the record high income of mutual fund companies. However, it may become a milestone that's hard to beat in the future," said Zhang Xiao, an analyst at Guodu Securities Co.
According to the reports, proceeds from stock trading accounted for 70.9 percent of the total.
Commissions from account management also soared to 28.1 billion yuan, growing four times from the figure in 2006 and was the fastest growth in history.
But market observers feel that the mutual fund industry may find it hard to repeat last year's phenomenal growth in 2008 as the stock market's performance has been generally gloomy since the start of this year and the benchmark Shanghai index has tumbled to around 3,500 from the peak of 6,124 in October last year.
Another factor that may be an obstacle is the tightening of various rules by the China Securities Regulatory Commission on mutual funds and fund companies this year.
Net value of the four QDII products - JP Morgan Fund QDII, Harvest Overseas Fund, Huaxia Global Selected Stock Fund and Southern Global Enhanced Balanced Fund - shrank by 6.3 percent to 12.1 percent of its initial value by the end of last year, according to their 2007 annual reports.
Southern Global made the smallest loss in net value while Harvest Overseas suffered the most.