Having enjoyed several years of heady growth, Chinese asset managers are now rapidly adjusting their strategies to avoid being whipsawed by the dramatic decline of the country’s stock market this year, according to Institutional Investor’s exclusive annual survey of the Chinese money management industry.

China Asset Management Co. tops the II’s 2008 China 20 ranking of the biggest fund managers, rising two spots from a year earlier after more than tripling its assets, to $35.7 billion at the end of 2007. Bosera Fund Management Co. rises three places to second; its assets more than quadrupled, to $35.3 billion.

Harvest Fund Management Co. falls two places to third, notwithstanding a 148 percent jump in assets, to $34.5 billion. China Southern Fund Management Co. slips from No. 2 to No. 4, even though assets grew 153 percent, to $31.4 billion; and E Fund Management Co. falls one place to fifth after nearly tripling its assets under management, to $26.8 billion.

The sharp drop in equity prices, which has seen the China Securities Index Co.’s benchmark index plunge 69 percent from its October 2007 peak to just over 1820 as of October 16, 2008, confronts fund managers with the first major bear market since the industry took off in earnest earlier this decade. Managers are responding by stepping up investor education programs and improving customer service in a bid to retain clients.

“Investor education is critical in the months ahead to sustain our growth in the longer term,” says Li Quan, Bosera’s head of marketing and sales. “We tell them we have no control over the short-term market but that we expect the market to grow in the long term.”

Click HERE or on the China 20 Ranking link above to view the top firms in total assets under management and in various categories of assets

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