Open-end Funds Shed A-share Holdings

飞雪寒冰

Most open-end managed funds reduced their A-share holdings in the past several weeks as the market declined, according to a Citic Securities survey.

The broker said in a report published on Aug. 31 that the average stock position of the 291 open-end funds it monitored was 80.23 percent in the week of Aug. 24-28, down 1.85 percentage points from a week earlier.

The benchmark Shanghai Composite Index fell nearly 7 percent on Aug. 31, ending the month down 21.8 percent, the biggest monthly fall since October 2008.

DeSheng Fund Research Center said managed funds had been cutting stock holdings for several consecutive weeks, but the overall position was still high, indicating that funds are optimistic about the stock market in the longer term.

飞雪寒冰

Liu Zhijing, an analyst with China Galaxy Securities, said the prices of financial, property and coal shares, held by many managed funds in the first half, plunged in recent weeks. However, Liu said, the net value of fund products declined by a smaller amount, which indicated that fund managers had just adjusted their equity portfolios.

A fund industry source, who asked not be identified, told Caijing that further dramatic cuts by managed funds were unlikely, but the market should be alert to a gradual decline of stock positions, as the managed fund sector has more than 2.3 trillion yuan under management and any adjustment could mean a consolidation in stocks.

The stock market needs to develop more long-term institutional investors to balance managed funds' influence, the source said.