Funds expected to continue expansion

China's fund industry is expected to start a new round of expansion this year. Nine new funds are already jostling for investors, with their focus being on performance in stocks.

In 2009, the main board market rebounded 80 percent. New funds played an active role in the market. A record high of 121 new funds were issued, raising 380 billion yuan in total. Each fund raised 3.2 billion on average, up 60 percent compared to the previous year.

The momentum is expected to continue this year. But insiders also point out that market conditions will determine whether or not more funds will be issued.

Zhang Gang, Chief Analyst of Southwest Securities said "How many new funds are issued and how much capital is raised depends on market performance. Usually when the market is rising, more new funds are issued and more capital is raised. "

Starting from the fourth quarter of 2009, 35 new funds have been issued, raising 87 billion yuan. That means 2.5 billion yuan on average.

Insiders say the 9 new funds issued this year are expected to pull in 22 billion yuan in the first quarter.

Meanwhile, according to financial data provider, Wind Info, apart from new funds, 295 funds that focused on stock investment posted a yield of 78 percent on average, with highest reaching 116 percent, and the lowest falling to only 9 percent. In addition, half of all funds did not reach their target yields. Among 295 funds focusing on stock investment, 147 failed to meet their targets.