Investment schemes using big data analysis has emerged as a popular trend among China's mutual funds, following the expansion into the financial industry of huge Internet firms, China Times reported.
Ten companies offering mutual funds in China, such as GF Fund Management and China Southern Asset Management, have either started or expressed plans to start offering mutual funds that run on strategies based on big data analysis.
After Alibaba's Yu'ebao and other online money market funds made it big as a significant sales platform, the big data funds have gained ground as the next bestselling product for mutual fund firms. Some Chinese mutual fund companies have tapped e-commerce channels, including JD.com, Taobao and WeChat.
Majority of the big data funds available in the market are investment funds that follow a specific stock index. For example, the pioneer in big data funds, introduced by GF Fund Management in October last year, monitors the CSI Baidu Baifa Strategy 100 index compiled by China Securities Index (CSI) using data analysis from top Internet search provider Baidu.
Since its opening in October, the fund reached a net value hike of 51.62 percent.
A new mutual fund offered by the joint venture of GF Fund Management and Baidu will be monitoring the CSI 800 Index and Aggregate Bond Index.
The emergence of big data funds has formed a new sector for competition among China's top three Internet firms: Baidu, Alibaba and Tencent.
In terms of partnerships, Tencent chose Galaxy Asset Management as its partner, while Alibaba went with its Ant Financial unit and affiliate Shanghai Gildata. Together with its partners, Alibaba launched the CSI Taojin Big Data 100 Index, which consists of firms chosen through data gathered from Alibaba's e-commerce channels.
Another player joined the battleground a bit late, Dacheng Fund. The company allied with Internet security provider Qihoo 360 and released in August the CSI 360 Internet+ Big Data 100 Index, China's first index that follows online finance sectors.
Wen Zhimin, Dacheng Fund's chief strategy officer, said that the firm aims to offer five to six big data-based investment products, and added that the investment business will be redefined in the consolidation of big data, the Internet and artificial intelligence.