China's Exchange-Traded Funds Intensify Price Competition by Cutting Fees

China's leading fund companies have intensified price competition in the rapidly expanding $400 billion market by announcing a reduction in fees for a group of exchange-traded funds (ETFs). The move to lower management and custody fees came a day after China's top securities regulator, Wu Qing, pledged to promote index investment and reform fees in the fund industry.

China’s largest ETF manager, China Asset Management Co (ChinaAMC), stated that it would reduce fees for eight ETF products, including the China SSE 50 ETF valued at 160 billion yuan ($22.10 billion), to "lower the wealth management costs for investors." The management fee will be reduced from 0.5% to 0.15%, and the custody fee will be cut from 0.1% to 0.05%. Other fund companies, such as E Fund Management, Huatai-PineBridge Fund Management, Harvest Fund Management, and HuaAn Fund Management, have also made similar announcements. According to BNP Paribas, net inflows into China’s onshore ETFs have exceeded 900 billion yuan so far this year, on track to record the largest inflows in the past decade.