(Yicai) April 26 -- Chinese mutual funds became profitable again in the first quarter after three straight quarters of losses amid rebounding stock prices and investors' increased appetite for exchange-traded funds.

From January to March, China's 11,560 mutual fund products accessible to retail investors achieved a combined net profit of CNY22.3 billion (USD3.1 billion) after a cumulative net loss of CNY1.9 trillion (USD262.2 billion) in the past two years, according to financial data provider Wind.

Fixed-income products still contributed most of the gains. Bond funds recorded a profit of CNY91.7 billion in the first quarter while money market funds, which focus on short-term debt instruments and cash equivalents, earned CNY63.2 billion.

Mutual funds that solely focus on stocks and hybrid funds that mix stocks with bonds lost CNY49.8 billion and CNY87.1 billion, respectively, narrowing losses from the previous three quarters.

A strong rebound in mainland-listed shares in February caused most of the recovery in equity funds as the Shanghai Securities Composite Index rose by 8 percent that month after a 6 percent decline in January.

The key index of all stocks that are traded at the Shanghai Stock Exchange [SHA: 000001] climbed by 1.2 percent today and is 3.8 percent higher since the beginning of this year.

Investors have started boosting their holdings of ETFs which usually track indexes of stocks or bonds. In the first quarter, six mainland-listed ETFs grew by more than CNY30 billion (USD4.1 billion). The CSI 300 ETF managed by E Fund Management ranked first with an increase of CNY87.3 billion.

Driven by ETFs, the scale of China’s mutual fund products reached CNY29.2 trillion as of March 31, up by 9.4 percent from a year ago. China is home to six public fund companies with more than CNY1 trillion of assets under management, namely E Fund, China Asset Management, GF Fund Management, China Southern Fund Management, Tianhong Asset Management, and Bosera Asset Management.

Editors: Dou Shicong, Emmi Laine