(Bloomberg) -- Chinese mutual fund houses are cutting fees on their exchange-traded fund products, as they heeded authorities’ call to support the nation’s $10 trillion stock market.
Leading firms including China Asset Management Co. and E Fund Management Co. announced Tuesday that management fees for some of their equity ETFs will be lowered to 0.15% from around 0.5%, according to statements on their official websites. Custodian fees will be halved to 0.05%.
The move followed authorities’ call to cut fees in the mutual fund industry, as part of measures to bolster the world’s second-largest share market. China’s securities regulator moved to cap management and custodian fees on newly-registered active equity funds last year.
Bloomberg Intelligence analyst Eric Balchunas said the “national team,” which had piled $92 billion into ETFs this year, might have pushed for the fee reduction. The national team refers to state-backed funds that Chinese authorities lean on to buy stocks during times of turbulence.
The products involved in the latest round of fee cut covered almost all of the ETFs favored by the national team, with 77% of them having charged a 0.5% management fee, he said.
While China’s stimulus package announced in late September stoked a rally in onshore stocks, gains have eased in the past month as investors awaited more policies to fight a slowing economy and weak corporate earnings.
China Securities Regulatory Commission Chairman Wu Qing reiterated Tuesday at a conference in Hong Kong that the regulator will continue to push reforms to reduce fees in the mutual fund sector and support the development of equity funds.
--With assistance from Jack Wang.
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