Chip sell-off helps boost China’s private funds as US$83.3b is pulled out of mutual funds

Mutual funds’ net assets under management shrank by 1.4 per cent in July, while private funds grew 8.7 per cent to record high

The assets managed by China’s private funds grew last month as those of its mutual funds shrank, with investors diversifying their portfolios amid a sell-off of semiconductor shares.

The net assets under management (AUM) of domestic mutual funds shrank by 560 billion yuan (US$83.3 billion), or 1.4 per cent month on month, in July to 39.11 trillion yuan, according to data released by the Asset Management Association of China on Wednesday.

The decrease ended a four-month run of mutual fund growth, with net AUM hitting a record high 39.67 trillion yuan by the end of June, data from the association, which is backed by the China Securities Regulatory Commission, showed.

By contrast, China’s domestic private funds managed a record 25.73 trillion yuan of assets by the end of July, up 2.07 trillion yuan, or 8.7 per cent, in a month, according to the association’s data.

The July increase marked the 10th consecutive month of expansion of private offered funds in China.

Mainland China’s markets and their global peers witnessed a slump in semiconductor shares in July amid growing concerns over the monetisation of artificial intelligence. Shanghai’s chip-heavy Star 50 Index plunged nearly 26 per cent in July, deeper than the 8 per cent fall in the broader CSI 300 Index, which tracks leading companies on the main boards in Shanghai and Shenzhen.