Why China’s index-fund boom has been worrying investors

Why China’s index-fund boom has been worrying investors

A shareholder checks the closing stock index of the A-stock market in Shanghai, China, Nov 4, 2022.

Synopsis

Launch of hundreds of funds targeting specific themes and sectors, including decarbonization, semiconductors, vaccines, and national security, energized China’s USD300 billion index fund sector over the past three years. This has led to a fierce competition among Chinese money managers. What could be their cause of concern?

Zhang Yukun Fierce competition among Chinese money managers has energized the country’s 300-billion-dollar index fund sector over the past three years, with the launch of hundreds of funds targeting specific themes and sectors including decarbonization, semiconductors, vaccines, and national security. Faced with a saturated market for broad-based funds that track major indexes like the benchmark CSI 300, and struggling to stand out in a crowded

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