“People are willing to invest their money, and they've been keen to shift from the low-return bank deposits to mutual funds where experts handle their funds,” said Yi Linming, an analyst with Industrial Securities.
By the end of 2007, net assets of
Chinese investors have been eager to profit from the booming stock market, converting bank deposits into mutual funds. Analysts predict the approximately 16 trillion yuan, or $2.2 trillion, held in Chinese bank deposits have the potential to fuel further growth in the mutual fund industry.
A survey last year found that 83% of Chinese respondents said mutual funds are the first choice for wealth management purposes.
“Once they realize investing in mutual funds is more profitable and less risky than buying individual stocks by themselves, they just swarm to funds. It's the herd instinct,” Yi said.