China is the least-friendly market for mutual fund investors because of “high fees, limitations on overseas investing and restrictions on foreign-domiciled funds,” Morningstar said Tuesday.
In its Global Fund Investor Experience Study, Morningstar examined mutual fund investor experiences in 25 countries and ranked them on four categories: regulation and taxation (20% of score weight), disclosure (30%), fees and expenses (25%), and sales and media (25%).
In terms of expenses, China ranked second-last (ahead of only Canada). Morningstar cites particularly high fees in Chinese allocation and money market funds, where average fees were 1.76% and 0.63%, respectively. Annual fees for equity and fixed-income funds were 1.76% and 0.89%, respectively.
The Chinese market has long been viewed as an enormous opportunity for money managers around the globe, given the country’s economic and demographic trends.