A year ago, Chinese investors poured their money into mutual funds, believing they would receive huge returns on their investments, Business Times Singapore reports. Since the market bubble began shrinking last October, however, mutual fund investments have declined. Chinese mutual funds have declined 30% in the first half of this year, down 668.8 billion yuan in the first quarter and 413.9 billion yuan in the second quarter.


Even as China tries to create new funds and regulations to boost new investments, sentiment has not improved. The average weekly number of new fund accounts in 2007 averaged around 450,000; it has steadily declined to 30,000 since April, reaching 17,295 in the week of July 7 to July 11.


Meanwhile, investors have rushed to redeem their investments as net redemptions reached 54 billion, up from 17 billion in first quarter, as they fear the rise of domestic stocks will soon end.

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