Fidelity International Plans Exit From China Retail Fund Market

Fidelity International is planning to withdraw from its retail fund venture in China after failing to reach a $14 billion asset threshold necessary for profitability. The firm's wholly-owned subsidiary in Shanghai managed only $670 million, representing less than 5 percent of its target goal.

This move follows a broader trend of global asset managers reducing or ending their operations in the region. The Vanguard Group closed its Shanghai office in 2023, while Legal & General canceled its business license plans and reduced its Shanghai presence by 80 percent. Additionally, Schroders is planning to sell its China funds to a unit of Neuberger Berman.

Foreign firms have struggled to compete with domestic fund managers who maintain superior brand recognition, established distribution channels, and closer ties to regulatory agencies. While joint ventures like JP Morgan Asset Management China have remained successful, newer greenfield ventures have faced disappointing growth. The decline is attributed to fierce local competition, geopolitical tensions, and regulatory actions by the Government of China, including recent restrictions on algorithmic trading.