BEIJING - China's major fund managers reported high profits for the first half of this year despite investors' huge losses after buying their funds.
China's 18 big fund companies posted net profits totaling 2.34 billion yuan ($344.41 million) in the January-June period, up 22 percent from a year ago, said WIND, a Chinese financial terminal service provider, on Friday.
However, investors who bought fund products from those 18 companies suffered huge losses totaling 154.83 billion yuan in the period due to sharp falls on the Chinese stock markets, it said.
China's Shanghai Composite Index lost 26.82 percent in the first half this year, sending many of 250 open-ended funds issued by those 18 fund companies below their 1-yuan face value per share.
Ren Tong, a fund analyst at Essence Securities, said those major fund companies made profits from an increase in management fees charged on fund investors.
Investors increased their holdings of such equity funds by 8.233 billion shares in the first half, which also boosted management fee incomes for fund managers, Ren said.
Investors usually have to pay a fixed management rate of 1.5 percent to fund companies on the funds they bought. Other commissions charged on investors include subscription fees and redemption fees.
The 18 major fund companies earned a total of 5 billion yuan of management fees in the first six months, according to the WIND's figures.
A report released by the Chinalion Securities in July said China's fund sector, consisting of 652 mutual funds and 60 fund companies, lost a combined 351.4 billion yuan in the second quarter compared with a combined loss of 668.8 billion yuan in the first quarter.
