WHILE China's mutual funds posted "relatively heavy" losses in March, currency-invested funds made gains, Lipper Fund Market Insight Reports said yesterday.
Products under the Qualified Domestic Institutional Investor scheme and the Qualified Foreign Institutional Investor scheme performed better than stock-invested funds.
"The bad performances of Chinese stocks led to losses for mutual funds. The QDII products dropped less as the United States carried out some measures to rescue its market," said Zhou Liang, China research head at Lipper, a fund-analysis unit under Reuters.
The value of China's stocks shrank 34 percent in the first quarter this year, the biggest quarterly loss since 1992.
In comparison, overseas markets halted their straight plunges after the US Federal Reserve cut interest rates and allowed some innovative tools such as loan auction to save the American stock market.
Under such a climate, stock-invested mutual funds posted a loss of 17.15 percent in March. Four QDII products issued last year lost 9.58 percent while QFII products fell 16.39 percent.
Currency-invested funds, on the other hand, gained between 0.15 and 0.32 percent last month.
"The volatility in China's stock market had something to do with the correction in global financial markets. But it was fundamentally caused by the problems within itself, such as too high evaluation of shares previously, a huge supply of new shares after former non-tradable shares became tradable and companies' refinancing plans," said Zhou.
He predicted China's stock market won't be stable in the short term and it is more important for investors to make money safely than to pursue high yields at the moment.