(Yicai) Jan. 29 -- China's mutual funds racked up losses of CNY434.7 billion (USD60.6 million) last year, dragged down by the sluggish stock market. It is the first time that the sector has lost money for two years running.

Some 18,869 mutual funds logged a net loss of CNY228.8 billion (USD31.8 billion) in the fourth quarter last year, which was a narrowing of 34 percent from the third quarter, data from securities consultancy TX Investment Consulting showed. They recorded losses of CNY220 billion in the second quarter but posted profit of CNY361.2 billion in the first quarter.

It is still an improvement from 2022’s losses of CNY1.4 trillion (USD202 billion). That year, the Shanghai Composite Index, the benchmark index of the Shanghai Stock Exchange, plunged 15 percent from the year before. And in 2023 it slumped 3.7 percent.

China’s mutual funds continue to face a situation where equities are losing money and fixed-income products are making money. Equity funds hemorrhaged CNY145.2 billion (USD20.2 billion) in the three months ended Dec. 31, while funds investing in stocks and bonds lost CNY187.3 billion. But bond funds and money market funds raked in profit of CNY50.9 billion (USD7.1 billion) and CNY58 billion, respectively.

Investors are trying to recoup their investments and the size of newly-issued funds is falling. The number of new mutual funds issued last year slumped 15 percent from the year before to 1,177, while the number of shares they contained contracted 24 percent to 1.1 trillion, according to data from consultancy firm Datayes.

In the fourth quarter last year, the size of active equity funds tumbled 8 percent from the previous quarter to CNY3.7 trillion (USD515.3 billion), falling for the third straight quarter, according to Cinda Securities. But the overall size of China's mutual funds edged up 0.4 percent on Dec. 31 from Sept. 30 to CNY27.3 trillion (USD3.8 trillion).

Editors: Dou Shicong, Kim Taylor