China Fund Industry Report, 2006-2007
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As of June 30 2006, a total of 266 security investment funds are formally put into operation, with total net asset value of RMB 511.416 billion and total share scale of 426.909 billion units. Of these, the net asset value of 54 closed-end funds amounted to RMB 119.615 billion, accounting for 23.39%; and the share scale reached 81.7 billion units, accounting for 19.14% of the total. The net asset value of 212 open-end funds topped RMB 391.8 billion, accounting for 76.61% of the total and the share scale reached 345.209 billion units, accounting for 80.86% of the total. In the first half of 2006, stock-directed funds increased from 165 units to 189 units, and their total net value also increased from RMB 237.147 billion to RMB 338.996 billion, up by RMB 101.849 billion. The increase was mainly driven by the robust growth of A shares in China.

Top 20 Allocation Funds in Net Value Growth,H12006

China Financial Futures Exchange established in Shanghai on Sep 8, 2006. And following it, the forthcoming domestic equity index futures transaction is expected to activate the closed-end funds market of 81.7 billion units, which would decline the discount rate of closed-end funds and promote annual rate of return on arbitrage to be rational level. Also on September 8, 2006, ChinaAMC Xing Ye Fund began application, which regarded as the first case of fund reform in China for the matured closed-end funds convert into open-end fund. This marked the beginning of closed-end funds with total 81.7 billion units convert into open-end funds.

It's estimated that there will be a huge room for the development of China fund industry. Firstly, available financial resource and financial structure have been experiencing a transformation in China. Secondly, compared to overseas fund, it can be seen that as early as the end of 1999, US Mutual Fund had become the largest financial intermediary in US financial market, accounting for 29% of financial assets while the fund only shared around 1.5% of financial assets in China.

In fact,the economy is experiencing a steady and high-speed growth as well as the profit of enterprises, the demands for investment and financing are also strong owing to the long-term low interest rate and low inflation and moreover, the pension system is getting reformed. All the above factors can offer key incremental capitals for mutual funds. Besides, another important assumption lies in corresponding expansion of market depth, including both institutional expansion brought by full circulation reform and large numbers of quality companies listing in stock exchanges. However, in spite of the great opportunities, the market concentration shows an obvious decline in China fund industry and the competition is getting unprecedented rampant among fund companies with homogeneous profit-making modes. Now since increased competition has reduced profit margin, fund management companies have to take market shares and make a profit by speeding up to lunch new funds. However, this kind of profit-making mode is dangerous when the fund issue runs into plight. As a result, all of these conclude that on one hand, the traditional growth mode of China fund industry is restricted by market environment, and on the other hand, it should get changed.

1 Development of China Fund Industry in 2005-2006
1.1 Overview 
1.1.1 Development in 2005 
1.1.2 Development in 2006
1.2 Operating Performance of Fund Companies in 2006
1.2.1 Operating Performance and Dividend Distribution of Funds in 2006
1.2.2 Management Revenues of Fund Companies in 2006
1.2.3 Custodian Bank's Revenues from Custodian Fees in 2006 
1.2.4 Funds held by Related Parties and their Profits in 2006
1.3 Development of Equity Funds in 2006 
1.3.1 Dividend Distribution
1.3.2 Net Value Growth of Equity Fund in 2006
1.3.3 Achievements of Growth Equity Funds in 2006
1.3.4 Fund Stock Positions at the End of the Second Quarter of 2006
1.3.5 Turnover Growth of Stock-Directed Funds in 2006 
1.4 Development of Closed-end Funds in 2006
1.4.1 Achievements in 2006 
1.4.2 Holders of Closed-end Funds in 2005-2006 
1.4.3 Development of Closed-end Fund in Secondary Market in 2006 
1.4.4 Dividend Distribution of Closed-end Funds in 2006
1.4.5 Distributable Earnings of Closed-end Funds in 2006 
1.4.6 Equity Index Futures are expected to Activate 80 billion units of Closed-end Funds
1.5 Development of Open-end Funds in 2006 
1.5.1 Scale in 2006 
1.5.2 Net Value in 2006 
1.5.3 Market Performance of Newly-issued Open-end Equity Funds in 2006 
1.5.4 Issue in 2006 
1.5.5 Dividend Distribution in 2006 
1.5.6 Achievements in 2006 

2 Developments of Related Industries in 2005-2006
2.1 Security Industry
2.1.1 Development in 2006 
2.1.2 Formal Initiation of Full Circulation, 2006 
2.1.3 Effects of Collective Financing of Securities Dealers on Fund Industry
2.1.4 Debut of Securities Dealers' Wholly-owned Holding Fund Companies
2.2 Banking Industry
2.2.1 Overview 
2.2.2 Development in 2006 
2.2.3 Development of Bank-Operating Funds in 2005-2006 
2.3 Insurance Industry
2.3.1 Overview 
2.3.2 Development in 2006  
2.3.3 Fund Investment of Domestic Insurance Companies in 2006 
2.4 QFII 
2.4.1 Development of QFII in 2006 
2.4.2 QFII's Position-holding by the End of the Second Quarter of 2006 
2.4.3 QFII's New Policies Trigger Qualification Contest of Agent Securities Dealers
2.5 Social Security Fund
2.5.1 Development in 2006 
2.5.2 Initiation of Overseas Investment of National Social Security Fund 
2.5.3 Transferring some Foreign Exchange Reserve into Social Security Fund 
2.5.4 National Audit Committee Fully Intervenes in Supervision of Social Security Fund

3 Developments of Private Placement Funds in 2005-2006
3.1 Development Overview in 2005 
3.1.1 Scale of International Private Placement Funds in China, 2005 
3.1.2 Scale of China Private placement Funds in 2005 
3.2 Development of China Private Placement Funds in 2006 
3.2.1 Lawful Status tends to be clear
3.2.2 Legalization Leads to Changes in Capital Structure
3.2.3 Legalization Guided by Four Aspects
3.3 Legalization of Private Placement Funds and its influences on Public Fund
3.3.1 Status Quo and Problems of Public Funds
3.3.2 Comparison of Private Placement Funds and Public Offering Funds and Status Quo
3.3.3 Legislation of Private Placement Funds has been a Trend
3.3.4 Effects of Legalization of Private Placement Funds on Public Offering Funds

4 Issuance and Sales of Funds in 2005-2006 
4.1 Issuance in 2006 
4.2 Status Quo of Marketing in 2005-2006
4.2.1 Segmented Products 
4.2.2 Funds Promotion at Various Phases 
4.2.3 Marketing Places 
4.2.4 Marketing Price 
4.3 Comparison of Sales Places among different Funds in 2005-2006 
4.4 Marketing Development Trend of Fund Industry
4.4.1 Be Segmented and Refined
4.4.2 Be sustainable  
4.4.3 Expansion of Funds Sales Places
4.4.4 Focus on Differentiated Service for Investors
4.4.5 Online Market grows gradually into Main Sales Channel of Funds

5 Competition Pattern in Fund Industry, 2005-2006 
5.1 Market Pattern in 2005-2006
5.1.1 Market Scale 
5.1.2 Structural Characteristics 
5.1.3 Structure of Fund Market Rates
5.1.4 Competition Pattern
5.1.5 Development Trend of Fund Market Pattern
5.2 System Pattern in 2005-2006
5.2.1 Equity Systems of Fund Management Companies
5.2.2 A Directorate Systems of Fund Management Companies
5.2.3 Supervisory Systems of Fund Management Companies 
5.2.4 Holder General Assemblies Systems of Fund Management Companies
5.2.5 Chief-Inspector Systems of Fund Management Companies
5.3 Business Pattern in 2005-2006
5.3.1 Overview of China Fund Management Companies in 2005-2006
5.3.2 Business Pattern Evaluation of Current Fund Management Companies
5.3.3 Business Breakthrough of Current Fund Management Companies
5.3.4 Business Expansion Trend of Fund Management Companies
5.4 Investment Pattern in 2005-2006 
5.4.1 Overview, 2005-2006 
5.4.2 Problems 
5.4.3 Forecast and Development Trend
5.5 Product Pattern in 2005-2006 
5.5.1 Product Investment 
5.1.2 Product Innovation 

6 Leading Enterprises
6.1 China Southern Fund Management Co., Ltd. 
6.1.1 Company Profile
6.1.2 Operation Status in 2006 
6.1.3 Latest Development
6.1.4 Development Strategies
6.2 E Fund Management Co., Ltd. 
6.2.1 Company Profile
6.2.2 Latest Development
6.2.3 Online-Trading Development
6.2.4 Investment Concept
6.3 ChinaAMC
6.3.1 Company Profile
6.3.2 Operation Status in 2006 
6.3.3 Latest Development 
6.3.4 Development Strategies
6.4 Hua An Fund Management Co., Ltd.
6.4.1 Company Profile
6.4.2 Operation Status in 2006
6.4.3 First QDII Foreign Currency Portfolios Debuts 
6.4.4 Development Track of its E-Commerce 
6.5 Bosera Funds
6.5.1 Company Profile
6.5.2 Operation Status in 2006 
6.5.3 Latest Development 
6.5.4 Formal Initiation of Bosera Funds' New Brand System
6.6 Guangfa Fund Management Co., Ltd.
6.6.1 Company Profile
6.6.2 Operation Status in 2006 
6.6.3 Investment and Management Capacity 
6.7 Harvest Fund Management Co., Ltd. 
6.7.1 Company Profile 
6.7.2 Latest Development 
6.7.3 Talent Strategy
6.8 YinHua Fund Management Co., Ltd.
6.8.1 Company Profile
6.8.2 Latest Development 
6.8.3 Start-up of 2006 Sustained Marketing Activities
6.9 Da Cheng Fund Management Co., Ltd.
6.9.1 Company Profile
6.9.2 Operation Status in 2006 
6.9.3 Latest Development 
6.10.1 Company Profile 
6.10.2 Operation Status in 2006 

7 Development Trend of Fund Industry 
7.1 Development Environments in 2006 
7.1.1 China Securities Regulatory Commission Regulates the Management of Fund Companies 
7.1.2 Issuance of Measures for Management of the Securities Settlement Risk Fund (New Edition)
7.1.3 Publication of Guiding Suggestions on Fund Management with 8 Basic Behavior Norm Listed 
7.1.4 Fund Investment and Management Mode Tends to be diversified 
7.1.5 Advantages in Backend Payment Speed up Replicating Hot Fund Investment
7.2 The 11th Five-Year Plan for China Capital Market 
7.2.1 Actively Develop China Capital Market during the 11th Five-Year Plan period
7.2.2 Five Improvements for Capital Market during the 11th Five-Year Plan period 
7.2.3 China Capital Market will realize Function Transformation during the 11th Five-Year Plan period
7.2.4 Investment Opportunities in China Capital Market during the 11th Five-Year Plan period 
7.3 Development Trend of Bank-Operating Funds
7.3.1 Ever-lasting Expansion of Bank Fund Cooperation Scope 
7.3.2 Expansion Heat of Bank-Operating Funds in 2006 
7.4 Development Trend of Annuity Business of Enterprises
7.4.1 Fund Companies Strive to Expand Annuity Market 
7.4.2 Annuity Business of Fund Enterprises Grows Better 
7.4.3 Participation in Offline Placement and Expansion of Profit Space 
7.5 Development Trend of Insurance Capital Investment Funds 
7.5.1 Total Value
7.5.2 Possible Appearance of Insurance-Operating Fund Management Companies in 2006 
7.6 Development Trend of Monetary Funds
7.6.1 Operating Performance in the First Half of 2006 
7.6.2 Revenues End Explosive Growth in 2006
7.6.3 Money Market Funds (MMF) is still in Shoal Waters 
7.7 Development Trend of Bond Funds
7.7.1 Unbalanced Development for Bond Funds in 2006 
7.7.2 Rising of Convertible Bond Financing
7.7.3 Intervention of Bank Financing Products result in Increasing Competition of Medium-short Term Bond Funds
7.8 Development Trend of Transforming from Closed-end Funds to Open-end Funds
7.8.1 Stepping into Substantive Operation
7.8.2 Introduction of Mechanism on Affirming the Ownership
7.8.3 Mergers are Possible by Means of Transforming from Closed-end Funds to Open-end Funds
7.9 Development Trend of LOF Funds
7.9.1 Status Quo 
7.9.2 Causes of LOF's Slack Market
7.10 Development Trend of QFII 
7.10.1 QFII will Enjoy Favorable Treatment 
7.10.2 QFII unties, Financing Channel Reopens and Bidirectional-Expansion Era is coming 
7.10.3 QFII Expects a Much Opener Market 
7.11 Development Trend of QDII 
7.11.1 Issuance of Detailed Rules on Overseas Investment of Funds 
7.11.2 Purchase of First Foreign Currency Fund for the First Day in September 2006 
7.11.3 Successive Appearance of QDII Products and Obvious Advantages of Foreign Currency Fund
7.12 Development Trend of Other Types of Funds
7.12.1 Customerized Financing Shows Great Opportunities
7.12.2 Closed-end Funds may Change into Dividend Funds 

8 Development Strategies of China Fund Industry 
8.1 Challenges and Counter-Measures 
8.1.1 Rampant Competition
8.1.2 Major Ten Challenges 
8.1.3 Counter-Measures against the Ten Challenges 
8.2 Development Strategies of Fund Industry under New Situation
8.2.1 To Expand Social Basis 
8.2.2 To Construct Clear Ecological Chains of Stock Market 
8.2.3 To Develop Harmonious Fund Industry
8.3 Solution to the Development of China Medium-small Fund Companies
8.3.1 Put-Forward of Problems
8.3.2 Survival Threats
8.3.3 Differentiated Development
Statistics of Fund Trading, Jan-Dec 2005
Statistics of Fund Trading in Shanghai Stock Exchange, Jan-Dec 2005 
Statistics of Fund Trading in Shenzhen Stock Exchange, Jan-Dec 2005
Statistics of Fund Trading in Jan-Jul 2006 
Statistics of Fund Trading in Shanghai Stock Exchange, Jan-Jul 2006 
Statistics of Fund Trading in Shenzhen Stock Exchange, Jan-Jul 2006 
Total Fund Asset Allocation in 2006Q2
Top 10 Funds in Unit Distributable Earnings, Mid-2006,
Development of China Security Investment Funds in the First Half of 2006 
Changes in Total Fund Shares and Net Income in the First Half of 2006 
Allocated Net Income of Funds in the First Half of 2006 
Operating Performance of Funds in the First Half of 2006 
Top 20 Fund Companies in Bonus Distribution in the First Half of 2006
Top 20 Fund Companies in Management Revenues in the First Half of 2006
Ranking of Fund Custodian Bank's Revenues from Custodian Fees in the First Half of 2006
Return on Investment (ROI) of Closed-end Funds in the First Half of 2006
Top 20 Closed-end Funds in Static ROI of Unit Share in the First Half of 2006
Closed-end Funds Held