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Mutual funds post first profit since 2007

CHINA'S mutual funds returned to profit for the first time since the end of 2007 as they benefited from the strong performance of the domestic stock market.

A total of 444 mutual funds, managed by 59 institutions, reported combined net earnings of 296 billion yuan (US$43 billion), the Shanghai Securities News reported yesterday, citing statistics from TX Investment.

They profited as the benchmark Shanghai Composite Index advanced a collective 30.34 percent in the first three months of this year.

A total of 211 equity funds posted net profits of 211.1 billion yuan while mixed funds reported 83.9 billion yuan.

"The A shares are likely to continue to climb in the second quarter despite small fluctuations, and we'll keep holding a high proportion of equities in our portfolio," said Chen Qin, a fund manager at Harvest Fund Management Co.

"We need to stay cautious although the rising index suggests optimism in the market and some of the shares are already at a high value," said Wang Yawei, a fund manager at China AMC.

But currency funds saw their net profit plunge 71.74 percent from the previous quarter to 848 million yuan while that of bond funds sank 99 percent to only 79 million yuan.

Losses of funds managed by Qualified Domestic Institutional Investors narrowed as overseas markets rebounded. Nine funds lost 139 million yuan, down 98.5 percent from the 9.03 billion yuan in the fourth quarter of last year.


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