BLACKROCK’S China mutual fund subsidiary set up its first fund in the country after raising 6.68 billion yuan (US$1.03 billion) during a shortened subscription period, signaling warm reception by investors.

Yesterday’s disclosure came a day after U.S. billionaire investor George Soros said it was a mistake for BlackRock to invest in China now, and likely to lose money for the U.S. fund giant’s clients.

BlackRock, the first foreign asset manager to operate a wholly-owned business in China’s US$3.6 trillion mutual fund industry, said its newly-launched China equity fund had raised 6.68 billion yuan from more than 111,000 investors.

The BlackRock China New Horizon Mixed Securities Investment Fund, launched Aug. 30, stopped taking new subscriptions Sept. 3, a week earlier than planned.

“We are very proud of achieving this milestone for our China fund management business, and are grateful for investors’ overwhelming support,” Rachel Lord, BlackRock’s chair and head of Asia-Pacific, said in a statement.

The fundraising by the world’s biggest asset manager is being closely watched as more global players prepare to enter China’s fast-growing, but highly competitive mutual fund market.

Fidelity International is setting up its mutual fund subsidiary in China, while Neuberger Berman, Schroders PLC and VanEck have also applied to set up China units to sell retail funds. China scrapped a foreign ownership cap in the sector April 1, 2020.

Zhang Chi, general manager of Shanghai-based BlackRock Fund Management Co., yesterday said the asset manager was committed to bringing long-term investment opportunities for Chinese investors, leveraging its track record in investing in China A-shares and its expertise.

BlackRock, which entered the Chinese market more than 15 years ago, also owns a minority-owned Chinese mutual fund venture with Bank of China Investment Management Co. and recently set up a majority-owned Chinese wealth management venture.

China’s mutual fund market is expected to grow to 60 trillion yuan in a decade, fund consultancy Z-Ben Advisors estimates, but competition is fierce in a sector crowded with more than 150 players. (SD-Agencies)