Three More China Funds Linked to 'National Team' Sell Holdings

(Bloomberg) -- Three more mutual funds linked to China’s so-called “National Team” sold their stock and bond holdings in the third quarter.

China AMC New Economy Flexible Allocation Mixed Launched Fund, Harvest New Opportunity Flexible Allocation Mixed Launched Fund and China Southern Consumption Power Flexible Allocation Mixed Launched Fund saw their combined net assets shrink to 252.5 million yuan ($36.3 million) at end of September, quarterly statements dated Friday show. The figure at the end of June was 39.3 billion yuan.

The liquidations come after two similar funds linked to the Chinese government said on Wednesday that they had done so in the third quarter without explaining why. The five mutual funds were described by state media as vehicles for China’s 2015 stock rescue, and the sales raise questions about the government’s response to this year’s $3 trillion sell-off in Chinese shares.

Some or all of the funds could have been moved to other vehicles, as the world’s largest exchange-traded fund tracking Chinese stocks received $1.19 billion of inflows this month, the most since 2015. The “National Team” has recently been buying stocks in a targeted manner, people familiar with the matter told Bloomberg.

The Shanghai Composite Index has lost more than 21 percent this year, making it the worst-performing benchmark globally. The measure is in line for a weekly gain of 2.1 percent, the best showing since Sept. 21.

To contact Bloomberg News staff for this story: Amanda Wang in Shanghai at twang234@bloomberg.net

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Philip Glamann, David Watkins

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