As we approach the dawn of 2025, a close look at the mutual fund market in China throughout 2024 reveals some intriguing trends and figures that highlight both the opportunities and the challenges present in this dynamic sectorThe data underscores the resilience of the fund industry and its ability to adapt, despite some volatility in the broader market landscape.

By the end of 2024, more than 1,130 new mutual funds were launched, with an initial fundraising amount of 1.18 trillion yuan, according to reports based on the subscription start datesThis represents a slight decrease in the number of funds launched compared to the same period last year, but the overall fundraising size has shown modest growth, exceeding the previous year’s total of 1.15 trillion yuanThese figures reflect a steady inflow of new capital into the market, which, despite a few market fluctuations, continues to attract significant interest from investors.

One noteworthy trend that has emerged in December is the number of funds that have chosen to cross into the new year with their fundraising periods

As of December 25, at least 36 funds had selected a subscription period that would extend into 2025, signaling ongoing investor optimismOf these, 17 were equity funds, and 11 were hybrid funds, suggesting a strong preference for equity-based investment strategies in the current market environmentMoreover, nearly 20 funds have already set their subscription start dates for January 2025, with equity-focused products continuing to dominateThe funds' strategies often center around widely followed indices such as the CSI 300, CSI 2000, CSI A500, and the STAR Market 50, all of which are seen as indicators of China’s burgeoning technology and innovation sectors.

In terms of subscription days, there is a notable variationFunds like the Dongfanghong Yuanjian Select and Morgan Stanley’s Shanghai Stock Exchange STAR Market New Generation Information Technology ETF have extended their subscription periods beyond 90 days, offering investors a longer window to commit

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On the other hand, the Southern China Securities Hang Seng Hong Kong Stock Connect Auto Industry Theme Index fund has a remarkably short subscription period of just five days, signaling a more niche and targeted approach to fundraising.

The year has also seen the return of some familiar faces in the fund management space, with several high-profile fund managers taking the reins of newly launched productsNotable names include Li Wenbin, who will lead the management of Yongying Rui Jian Jinqi, an actively managed equity fund that entered its fundraising phase on December 23. Meanwhile, in the realm of quantitative funds, Yang Meng, Director of Quantitative Investment at Baodao Fund, will manage the Baodao CSI A500 Index Enhanced Fund, which is set to launch on December 30. Similarly, Qi Liang, another well-known figure in the quantitative fund space, will lead the Wanjia CSI 2000 Index Enhanced Fund, which is scheduled for release in early January 2025.

One of the key trends to emerge in recent months is the growing popularity of funds that focus on China’s innovation-driven sectors, particularly those targeting the Sci-Tech Innovation Board (STAR Market). This market, which has seen a surge of new listings in recent years, is becoming an increasingly attractive investment avenue for public fund institutions

A number of funds are now specifically designed to tap into this growing sector, such as the Fuguo ChiNext 50 ETF and the Fuguo Shanghai Stock Exchange STAR Market 50 IndexThese funds are all poised for launch in early 2025, with many focusing on the technology, biotechnology, and clean energy sectors—industries that are expected to see significant growth as China accelerates its technological development.

Another noteworthy development is the launch of China’s first STAR Market 200 ETF, the Huatai-PineBridge SSE STAR Market 200 ETF, which officially listed on December 24. This ETF is part of a larger wave of STAR Market-themed index funds that have entered the market in recent monthsAdditionally, major fund houses such as E Fund, GF Fund, and Bosera Fund have recently received approvals for their respective STAR Market Artificial Intelligence ETFs, further demonstrating the growing investor appetite for innovation-driven investments.

But beyond the sci-tech boom, other sectors are also gaining traction among institutional investors

For example, Qianhai Kaiyuan Fund is preparing to launch a cyclical sector-themed fund, Qianhai Kaiyuan Cyclical Selection, in January 2025. Similarly, Zhongou Fund launched a resource-themed fund in December, the Zhongou Resource Selection Fund, which seeks to capitalize on the strong demand for commodities and natural resourcesIn addition, Huatai-PineBridge Fund and Great Wall Fund have both issued dividend-themed quantitative funds, reflecting an interest in stable, income-generating assets in an environment of fluctuating equity markets.

In addition to sector-specific funds, several major asset management firms are also introducing new types of productsFor example, Fidelity’s first-ever fund of funds (FOF), the Fidelity Renyuan Stable Three-Month Holding Mixed FOF, is slated for release in January 2025. This product represents Fidelity’s foray into the FOF market and is expected to appeal to investors seeking a diversified approach to asset management

Similarly, the recent launch of the First State Climate Change High-Grade Bond Index by Robeco Fund marks the company’s debut in the climate-themed investment space, which is expected to be a key growth area for the industry in the coming years.

Looking ahead to 2025, fund managers remain optimistic about the economic opportunities that the new year will bringAccording to Min Liangchao, a fund manager at HSBC Jintrust, 2025 is expected to witness turning points in various economic cycles, including demand, real estate, and capacityAs the supply-demand dynamic improves and corporate profitability rises, there are likely to be numerous investment opportunitiesThese cyclical shifts are expected to provide fertile ground for both equity and fixed-income investments, especially in sectors that stand to benefit from China’s economic transition toward a more innovation-driven model.

Indeed, 2024 has demonstrated that despite some challenges, China’s mutual fund market remains robust and continues to evolve, with a growing emphasis on innovation, technology, and sustainability