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Big data funds new battleground in China's online financial sector

09/06/2015| 6:41:39 PM|

The use of big data analysis to form investment strategies has become an emerging trend after major IT companies expanded into the financial sector.

The use of big data analysis to form investment strategies has become an emerging trend among mutual funds in China, after major internet companies expanded into the financial sector, reports the China Times.

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Ten mutual fund companies in China, including GF Fund Management and China Southern Asset Management, have either launched or plan to launch mutual funds that use big data analysis in making investment decisions, the newspaper said.

The big data funds have been seen as the next star product for mutual fund companies after Yu'E Bao and other online money market funds, which successfully established the internet as an important sales channel, the newspaper said.

Following the success of Yu'E Bao and similar products, Chinese mutual fund companies have further expanded online by establishing sales channels through e-commerce platforms, including Taobao, JD.com and WeChat.

Most of the big data funds in the market are investment funds that track a certain stock index, the newspaper said.

For instance, the country's first big data fund, launched by GF Fund Management in October 2014, tracks the CSI Baidu Baifa Strategy 100 index compiled by China Securities Index (CSI) based on the analysis of data from search engine Baidu.

Since the launch in October, the fund has recorded a net value increase of 51.62%, the newspaper noted.

GF Fund Management recently announced a new mutual fund under a partnership with Baidu, which tracks the CSI 800 Index and CSI Aggregate Bond Index.

The big data funds have become a new battleground for China's three top Internet companies–Baidu, Alibaba and Tencent, according to the newspaper.

While Baidu formed a partnership with GF Fund Management, Tencent picked Galaxy Asset Management as its partner. Alibaba, through its Ant Financial unit and affiliate Shanghai Gildata, launched the CSI Taojin Big Data 100 Index, components of which were selected based on the data collected through Alibaba's e-commerce platforms.

Despite its late start in the game, Dacheng Fund joined forces with internet security firm Qihoo 360 and launched in August the CSI 360 Internet+ Big Data 100 Index, the country's first index that tracks the Internet finance industries.

Dacheng Fund chief strategy officer Wen Zhimin said the company plans to introduce five to six big data-themed investment products, and said the combination of big data, the internet and artificial intelligence will revolutionize the investment business.

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TAGS: online finance | big data | Alibaba | Tencent | Baidu
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