Reuters – After an ill-timed launch, a Chinese fund that promised to offer global investors a “golden” opportunity to buy Chinese educational securities has fallen more than 40% this month, on track to become the worst-performing mutual fund. of the country in July.
Last week, Beijing banned for-profit tutoring in core subjects to ease financial pressure on families, a move that spooked investors in China’s $ 120 billion private tutoring sector.
As a result of those fears, the Bosera CSI Global China Education ETF 513360.SS, the country’s only exchange-traded fund dedicated to the education industry, ended on Friday at 0.537 yuan per fund unit, nearly half the value on its debut. June 17.
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The crash of the education exchange-traded fund (ETF), which invests in 50 large Chinese education companies listed in New York, Hong Kong and mainland China, also underscores the risk of overseas investment products in China.
The fund’s portfolio companies, including New Oriental & Technology Group 9901.HK and China Education Group Holdings 0839.HK, slumped in the wake of the government’s actions.
The ETF currently manages assets worth 176 million yuan ($ 27.25 million), according to Reuters calculations.
The strong loss contrasts with the optimism of the fund during its launch.
The ETF allows investors to buy stakes in Chinese educational companies that are listed around the world, accessing a “golden race track” that benefits from public aid and growing demand, according to the fund manager at the time. .
The ETF’s manager, Bosera Asset Management Co, declined to comment.
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In a trading communication, Bosera said the value of the fund’s unit may experience strong volatility in the future and warned investors of the risks.