More than 95% of Chinese domestic equity funds failed to match their benchmark index in the first three months of 2007, according to figures from fund analysts Morningstar, the Financial Times reported. While overall assets are believed to have risen by more than 25%, some funds have lost up to half their assets under management. The underperformance, which has been put down to managers having to maintain large cash reserves to cope with high fund flow volatility, is likely to put several foreign banks' fund management joint ventures under pressure. The funds run by ABN AMRO, Schroders and Deutsche Bank were among the 10 worst performers. Only nine of 183 equity mutual funds outperformed the Shanghai-Shenzhen 300 index, which jumped 36% in the first quarter. It is believed that some managers have been forced to keep up to 40% of their fund in cash as investors have stepped up their buying and selling of fund products. China's domestic stock markets were the best-performing in Asia in the first quarter, the South China Morning Post reported. The Shanghai Composite Index had gained 19.01% on the year by Friday, while Shenzhen had posted a 49.98% gain.