First-quarter investment in stocks by China’s trust companies was more than double that of a year before, for a total of about RMB777 billion (US$125.3 billion), Bloomberg reported, citing data released by the China Trustee Association. RMB225 billion of that came in the first quarter alone. Many investors have turned to umbrella trusts, which receive funding from both private investors and other sources, then plow proceeds into shares or other markets. Since the other sources get fixed returns while private investors get returns based on stock-market performance, umbrella trusts have become a way to borrow from trusts and banks to purchase shares.
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