Smaller mutual fund companies have received a significant regulatory boost. According to reports, the new batch of amortized cost bond funds collectively submitted by 15 fund houses was officially approved on September 14th, a remarkably quick turnaround of just one month after the initial filing.
Industry experts view this move as part of broader regulatory support measures aimed at fostering the healthy and orderly development of smaller fund companies. These amortized cost bond funds are expected to provide temporary relief to the operational pressures faced by some smaller firms while also channeling fresh capital into the bond market. However, for long-term sustainability, these companies must continuously strengthen their core capabilities to remain competitive in the increasingly crowded public fund landscape.
Fast-Track Approval for Smaller Firms
Marking a milestone for smaller players, the first batch of amortized cost bond funds has officially been approved. Confirmed on September 14th, 15 fund companies—including Baijia Fund, BlackRock Fund, Neuberger Berman Fund, Allianz Fund, AllianceBernstein Fund, Hongtu Innovation Fund, Shangzheng Fund, Rosy Fund, Guorong Fund, Huaxi Fund, Yimi Fund, Xinghe Fund, Xinghua Fund, Peng'an Fund, and Caixin Fund—have all received the green light for their respective products.
Notably, all 15 firms in this batch are classified as smaller fund companies. Among them, BlackRock, Neuberger Berman, Allianz, and AllianceBernstein are foreign-owned fund houses. These newly approved funds come with a standardized 63-month closed-end period and will terminate upon maturity. Similar to previous amortized cost bond funds, each product will cap its fundraising at no more than 8 billion yuan.
Firms Sprint Toward Launch
Fund companies are wasting no time preparing for the issuance phase. One company representative stated they plan to launch and begin operations as quickly as possible after receiving the approval. Another firm indicated they are already in intensive meetings to finalize distribution strategies.
"Typically, the custodian bank also serves as the primary distribution channel. Looking at the first and second batches of amortized cost bond funds, Industrial Bank is expected to secure 10 custodian mandates across both lists, corresponding to a sales target of roughly 800 billion yuan. Meanwhile, Shanghai Pudong Development Bank and China CITIC Bank are likely to each gain 5 custodian roles, with respective sales targets of about 400 billion yuan. This represents both a genuine test of the top distribution channels' coordination capabilities and a key differentiator in widening custodian scale gaps among institutions," one industry analyst noted.
For fund managers, the real competition will center on their expertise in positioning and managing these amortized cost bond funds. Under the amortized cost method, assets are not valued at market prices; instead, the difference between the purchase cost and the yield at maturity is amortized daily over the fund's life. For a 63-month closed-end product, if the manager fails to build the portfolio effectively within the initial 6-month window, the capital may only be deployed into lower-yielding instruments like repurchase agreements, resulting in noticeably weaker returns. Therefore, once the fund is launched and established, the primary challenge for the portfolio manager is to complete the positioning phase quickly and efficiently, ideally acquiring bonds at favorable prices that align with the fund's maturity timeline. The purchase price and final yield will directly determine the daily amortizable income throughout the fund's duration.
Supporting Differentiated Growth for Smaller Firms
Amid intensifying competition in the public fund industry, smaller companies face challenges in product development, channel access, and brand building. At the 2026 Lujiazui Forum, CSRC Chairman Wu Qing outlined a package of measures to support the standardized and healthy growth of smaller fund companies. The strategy emphasizes category-based supervision and distinct positioning, with appropriate policy tilts in areas like product structure and business entry to actively promote differentiated development among these firms.
The approval of these amortized cost bond funds, along with the filing of sci-tech bond index funds, represents a series of strong initiatives to back the healthy growth of smaller fund companies. These measures offer a viable path for these firms to leverage their fixed-income investment strengths and carve out specialized, differentiated strategies. By actively embracing such products, smaller players can help foster a market landscape where both "big and strong" and "specialized and refined" firms coexist, promoting a more diversified, resilient, and sustainable public fund industry.
Industry insiders believe that as supportive policies continue to roll out, the immediate survival pressures on smaller fund companies will ease considerably. However, the adage "to forge iron, one must be strong" holds true—lasting success ultimately depends on solid investment performance and irreplaceable differentiation, which alone can ensure truly sustainable and healthy growth.