Fidelity International plans exit from China fund unit

Fidelity International is planning to exit its wholly owned China fund unit, according to sources familiar with the matter. The London-headquartered asset manager, which oversees $1.18 trillion in client assets, is considering a total retreat from its onshore retail fund operations just three years after their launch.

Key drivers for the potential exit include intense local competition, frequent leadership changes, and difficulties in achieving necessary scale. Internal documents suggest the unit required at least $14 billion in assets to reach profitability, but current assets under management are approximately 4.5 billion yuan ($670 million), significantly below the target.

This move follows a similar exit by Schroders in July 2026. The situation highlights the challenges faced by foreign financial firms in China, where squeezed margins have impacted expansion since Beijing allowed fully foreign-owned units in 2020. While Fidelity International stated there is “no change to report on our strategy or market presence,” the planned departure underscores the headwinds in the Chinese retail investment market.