China funds cut ETF fees, escalating price war in booming market
exchange-traded funds (ETFs) on Wednesday, intensifying price competition in the rapidly expanding $400 billion sector of the market.
The move to cut management and custodian fees came a day after Wu Qing, China's chief securities regulator, pledged to encourage index investment and fund industry fee reform.
ETFs — funds that typically track an index and trade on an exchange — have boomed this year as fund companies compete fiercely to lure investors disillusioned by poorly performing active fund managers. The latest fee cuts are expected to potentially channel new capital into a waning bull market.
China Asset Management Co (ChinaAMC), the country's top ETF manager, said in a statement it would cut fees in eight ETF products, including the 160 billion yuan ($22.10 billion) China SSE 50 ETF, to «lower investors' wealth management cost».
The management fee would be slashed to 0.15% from 0.5%, while the custodian fee would be reduced to 0.05% from 0.1%.
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