Assets under management by the biggest 20 funds in China grew by 77 per cent in the in the year to December 2006.
 
Chinese money management firms now have a total of US$105 billion in assets under management, according to the latest survey by United States-based Institutional Investor magazine.

The survey said the phenomenal growth rate was driven by substantial inflows from investors and soaring stock prices.

The Shanghai Stock Exchange Composite (SSE Composite) Index has ballooned by well over 100 per cent since January, making many investors nervous that it has become overvalued.

Warnings in May from former US Federal Reserve chairman Alan Greenspan of a "dramatic contraction" in Chinese share values prompted a 6.5 per cent fall in the SSE Composite.

Since then, however, the index has surged. 

"Even though Chinese markets have soared in the last two years, the previous five years of lacklustre performance should not be forgotten," one China specialist said.

"During those five years, China's economy boomed yet the stock market did nothing but bottom out. We think the current run-up is more like a make-up for years of less-than-deserved results."

Harvest Fund Management came out top of Institutional Investor's rankings of Chinese fund managers. It has US$13.9 billion under management, up 168 per cent on last year.

Harvest's growth forced last year's top fund, China Southern Fund Management, into second place with $12.4 billion under management.

China Asset Management came third in the funds under management table, with US$10.9 billion under management.

E Fund Management was fourth with US$9.2 billion under management and Bosera Fund Management came fifth with US$7.3 billion under management.