Assets under management in China have grown an incredible 60% over the past three years, and while growth won’t continue at this rate, it will still increase at a clip of 24% a year over the next 10 years.

That’s according to a recent report from McKinsey, which says that the investment management industry will be the fastest growing segment of the financial services industry in the nation, China Daily reports. While the brokerage and mutual fund industry has expanded at a tremendous rate in the past two years, there’s room for even more growth, since the Chinese have 79% of their assets socked away in low-yielding bank accounts and only 3% of household assets are currently invested in mutual funds.

Demand will come not only from retail investors but also from the Chinese government, which runs the $40 billion National Social Security Fund and is prompting individual companies to provide pension plans for their workers.

“In 10 years, the assets under management of these enterprise annuities are expected to reach $150 billion, up from today’s $15 billion, partly as a result of their increasingly favorable tax treatment,” according to the McKinsey report.

Since China expanded the Qualified Domestic Institutional Investor program, which allows Chinese to invest in foreign investments through domestic firms, from fixed income to include equities in May, this will also boost the industry. Evidence of this came already with the offerings of QDII funds by four leading companies, China Asset Management, China Southern Fund Management, Harvest Fund Management and China International Asset Management—each raising $4 billion in a single day.

What could hold the market back, however, McKinsey said, is the lack of diversified offerings. “So far, the vast majority of mutual funds in China have offered strikingly similar compositions [due to] a limited number of attractive companies listed on the Shanghai and Shenzen stock exchanges,” the report said. “This makes it difficult for fund managers to differentiate themselves, let alone hedge against the market through other asset classes.”

It will also be hard for U.S. and other global asset managers to crack the market since there are already 27 foreign asset managers competing in China. “Multinational financial services companies can’t ignore this market, but capturing a large share of it won’t be easy,” McKinsey said.

Further, China’s securities regulator has been very slow and methodical about allowing new funds on the market, for fear of a market crash, and Chinese investors typically cash out of mutual funds within six months, so companies must constantly offer new funds to win investors’ loyalty.

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