Zhang Haifu isn't crazy. But from the perspective of his wife, he was a madman mortgaging their house to the bank for 300,000 yuan to buy stock funds. Zhang's wife could not accept the bold move because for her, the house meant family and if the house was gone, the family was no longer intact.

"I know what I am doing," Zhang Haifu said, calling his move an action after careful consideration.

Like many other Chinese, he threw caution--and security--to the wind to embrace new stock market opportunities.

Zhang Haifu and his wife run a supermarket and are already well-off. But the idea of riches beyond imagination crept into Zhang Haifu's mind last October, when he went to deposit money in the bank. It was then that he found a lot of people buying funds.

Zhang Haifu was no spring chicken in the financial market as he was once an avid stock market risk taker. So upon realizing one certain fund was doing well, Zhang Haifu bought it instead of depositing the money into a bank account. In just two months, Zhang earned a fortune.

By the middle of January, securities companies and banks saw people queuing to open new fund accounts. In January alone, a total of 1.85 million new accounts were opened.

Zhang Haifu's story epitomizes China's "fund rush" in recent months. According to Xinhua News Agency, the total number of fund account holders surpassed 15 million by the end of 2006.

Guo Tehua, General Manager of ICBC Credit Suisse Asset Management Co. Ltd. pointed out that citizens' enthusiasm about funds stems from the bullish stock market. In the second half of last year, China's yuan-denominated A share market began to jump. As most of the people who wanted to invest in stock did not know much about the market, they turned to open-end funds. From the perspective of fund buyers, the people who operate funds are experts in the financial market and it is relatively safe to give money to professionals and let them make decisions.

"About 98 percent of the subscriptions came from individual investors and these people are very enthusiastic," said Xu Xiaosong, Vice General Manager of China Southern Fund Management Co. Ltd. Xu said he had never seen such a vibrant scenario.

Zhang Haifu said when the Lombarda Open-end Fund was issued on January 4, he went to the bank four days later and was told it was sold out.

"To buy a fund is like buying discount products of a limited volume," Zhang Haifu said. "You will get nothing if you don't hurry."

The rise of funds

The buyers' enthusiasm also has made it easier to raise funds. Harvest Strategic Growth fund, launched last December, raised about 40 billion yuan on the first day it was launched. It is the largest fund in Chinese fund history and it would have taken several months to raise such an amount one year ago.

The Chinese fund industry has a history of only eight years. Total fund assets by the end of 2005 was 469.1 billion yuan, but now has surpassed 1 trillion yuan.

Statistics from TX Investment Consulting Co. Ltd. show that among the 1 trillion yuan in fund assets, open-end stock funds have taken up the most proportion--about 43 percent, which equals 427.25 billion yuan. The open-end mixed funds take up 27.5 percent of the total fund assets.

Fund manager Zhang Gang with China Nature Asset Management Co. Ltd. pointed out the "fund rush" has actually provided Chinese citizens a way to manage their spare money. The "fund rush" also indicated citizens' awareness of financing. Individuals' enthusiasm in open-end funds show that they have realized the risks of investing in the stock market and they would rather choose professionals to manage their money.

Zhang Gang said among the 10 trillion yuan value in the Chinese A share market, about 3 trillion yuan are tradable and the value of funds invested in the stock market has reached 850 billion yuan, taking up about one third of the total A share market value.