China Active Fund Watch June 2021: Are Insurance AMs Better in Fixed Income?

Investao Limited > Insight > China Active Fund Watch June 2021: Are Insurance AMs Better in Fixed Income?

Topic: Insurance AMs have a larger AUM than mutual funds. How they are performing?

Author: InvesTAO Research

 

Summary

  • Larger: By 2020, China’s insurance asset management AUM reached US$3.2tn, more than the US$3tn of Chinese mutual funds with nearly 70% coming from premiums under group level balance sheet.
  • Better: Insurance AMs have outperformed mutual funds with averages of yearly returns, and the top 30 strategies have secured their superior position in risk-adjusted returns, including 3-year annualized Sharpe and Calmar ratios of fixed income strategies, compared to the top 30 mutual fund peers.
  • More institutionalized: More diversifications have been encouraged in this mostly institutional market (most due to the status of Alternative Investment Fund (“AIF”); retailing only starts in 2015 with limited licenses), and more sectoral regulations have progressed at a steady pace, possibly providing insurance AMs more relaxed limits on accessibility, distribution and overall investment scope.

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