(Yicai) Aug. 27 -- With the ongoing rally in Chinese mainland stocks, public asset management firms have invested more than CNY329 million (USD46 million) of their own capital to purchase their equity funds in the second half of the year.

China Southern Asset Management and Huatai Securities Asset Management are among the Chinese public asset managers that unveiled their equity fund investment moves as of Aug. 25, according to incomplete statistics compiled by Yicai.

Huatai Securities Asset Management announced on Aug. 25 that it would invest up to CNY32 million (USD4.5 million) of its own funds in its in-house equity public funds in the near future, with a holding period of no less than one year, because it was bullish on the long-term, healthy, and stable development of China’s capital market and the company’s active investment management capabilities.

On Aug. 11, China Southern Asset Management said it had invested over CNY230 million of its own capital to invest in its equity funds China Southern CSI A500 Exchange-Traded Fund, China Southern S&P China A-Share Large-Cap Dividend Low Volatility 50 ETF, and China Southern CSI All Share Free Cash Flow ETF. The firm also pledged to hold them for at least one year.

As important participants in the capital market, institutions using their own capital for purchases can enhance investor trust through an interest-alignment mechanism and also convey firm confidence in the capital market, industry insiders believe.

Unlike the self-purchases in previous years during low-market periods, these ones come at an upward breakthrough phase. Moreover, unlike very vague announcements in the past, this time, several institutions disclosed the specific products purchased, made clear commitments to the holding period, demonstrating determination for medium-to long-term investment.

Some 127 Chinese asset management companies had invested over CNY10.9 billion (USD1.5 billion) of their own money to buy public funds this year as of Aug. 25, exceeding the figures for the past years, according to data from Wind Information. Among that, CNY2.7 billion (USD370.3 million) was used to acquire equity funds, exceeding last year’s total of CNY1.9 billion.

Of the 447 equity funds that received net subscriptions, over 97 percent posted positive returns, and nearly 60 percent outperformed their benchmarks this year, Wind data also showed. Seventeen of them had product yields of over 50 percent.

However, a fund industry insider from South China explained that there is no direct relationship between the market conditions and the scale of funds that asset management firms use for self-purchases. Moreover, the success of a fund does not depend on the fact that it received an investment from its asset manager, they added.

Investors need to observe the intensity of an asset management firm’s purchases and whether the fund itself is suitable for their risk profile, holding preferences, and risk-return expectations, the insider noted.

“Asset management companies’ purchases of equity funds with their own capital are not always concentrated when the market is at a low or high point, and they should not be considered buy signals,” an asset manager said, adding that self-purchases are an expression of an institution’s confidence in its own products and its judgment on market trends.

Market fluctuations are influenced by multiple factors, including the macroeconomy, policy environment, and liquidity, so investors need to formulate their allocation plans based on their own circumstances rather than following a trend, the asset manager noted.

Editor: Futura Costaglione