Chinese fund industry needs benchmarks

The two stock exchanges are being urged to create an all-China stock index.
 Jiashein English, Harvest Fund Management has a problem. It wants to launch a value fund. Others exist but fail to clearly define the concept of a stocks value, says Zhao Xue-jun, general manager in Beijing. Harvest is developing a system to screen stocks based on their price-to-book ratio along international standards. But when this product is launched, investors will have no way of discriminating this strategy against other so-called value funds.

China lacks benchmarks because it lacks indices. New funds require innovation, says Zhao. The current 33 closed-end funds are all fairly similar.

Currently, most funds are balanced funds, meaning they invest across sectors not balanced in the international sense,...

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