Key facts
- Fidelity International denied reports of exiting its wholly owned China fund business.
- The company stated its strategy and market positioning in China remain unchanged.
- Fidelity views China as an important market with attractive long-term opportunities.
- Its first mainland mutual recognition fund began sales on August 10.
- Reports cited competition, management turnover, and scaling issues as reasons for potential withdrawal.
- Fidelity's China retail fund products have approximately $141.2 million in assets under management.
Fidelity International has denied speculation that it is considering shutting down its wholly owned mutual fund business in China, stating that its strategy and market positioning in the country remain unchanged. The asset management giant views China as an important market offering attractive long-term opportunities for both its business and investors.
Earlier reports, citing sources familiar with the matter, suggested that Fidelity International was planning to withdraw from its 100%-owned China fund subsidiary due to intense competition from domestic firms, frequent management turnover, and difficulties in scaling the business to achieve profitability. These reports indicated that the retail asset management business in China was deemed unsustainable.
Fidelity International, headquartered in London, manages $1.18 trillion in client assets globally. Its 14 retail fund products sold in China have combined assets under management of approximately $141.2 million. The company's fund management assets in China peaked at about $188.3 million one year after establishment but had declined 25% by the end of June this year. Internal documents suggested the China business would require at least $14 billion in assets under management to become profitable, and its Shanghai-based subsidiary employs around 100 staff.
China has allowed foreign asset managers to operate onshore with 100% ownership since 2020, with several global giants, including Fidelity and BlackRock, establishing local entities. However, many foreign firms face challenges in product differentiation and scaling, while domestic companies benefit from established distribution channels and brand recognition. Fidelity recently launched its first mainland mutual recognition fund, with official sales commencing on August 10, and continues to emphasize its commitment to Chinese investors through cross-border solutions.
China's central bank governor, Pan Gongsheng, has emphasized promoting high-level financial opening-up and deepening financial market connectivity, welcoming overseas investors.