AllianceBernstein Holding LP (AB Quick QuoteAB - Free Report) received a license to operate its wholly-owned mutual fund business in China. The news was reported by Reuters.

"AllianceBernstein will offer Chinese investors onshore investment products and solutions, and help them explore opportunities in China's domestic market," the company noted in a statement posted on its WeChat account.

This makes AB the latest foreign asset manager to leverage China's $3.8-trillion mutual fund market.

Markedly, in 2020, China removed limitations on foreign ownership in its mutual fund industry.

Following this, several global banks have been rushing to capitalize on the lucrative prospect. The country has become the preeminent equity market globally, and is one of the broadest and deepest growth markets outside the United States.

Notably, firms like JPMorgan (JPM Quick QuoteJPM - Free Report) and Goldman Sachs (GS Quick QuoteGS - Free Report) have expanded their operations in China.

JPMorgan and Goldman received approvals to own 100% of their onshore securities joint ventures in August and October 2023, respectively. Additionally, GS and JPM plan to expand in the country to diversify revenues, and increase their global footprints and market share.

However, China's mutual fund industry has been witnessing headwinds, with the market seeing a loss for the third straight year in 2023. Also, foreign players are dealing with challenges like geopolitical risks and the tightening of China’s data security.

Hence, AB’s efforts to enter the China mutual fund market indicate the confidence of foreign investors in the China capital market.

AB shares have inched up 0.6% over the past three months as compaed with the industry’s rise of 19.9%.

Image Source: Zacks Investment Research

Currently, AB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.