Category: Business

SHANGHAI/HONG KONG – Major Chinese fund companies announced a big reduction in fees for a batch of equity exchange-traded funds (ETFs) on Wednesday, intensifying price competition in the rapidly expanding $400 billion sector of the market.

The move to cut management and custodian fees by as much as 70% came a day after Wu Qing, China’s chief securities regulator, pledged to encourage index investment and fund industry fee reform.

ETFs – funds that typically track an index and trade on an exchange – have boomed this year as fund companies compete fiercely to lure investors disillusioned by poorly performing active fund managers. The latest fee cuts are expected to potentially channel new capital into a waning bull market, but will also hurt industry margins.

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“A lower price point is emerging for ETF fees. This may kindle wider fee compression in the coming quarters,” fund consultancy Z-Ben Advisors said in a note to clients.

“Managers must adapt and internalize costs to align with the direction of policy.”

China Asset Management Co (ChinaAMC), the country’s top ETF manager, said in a statement it would cut fees in eight ETF products, including the 160 billion yuan ($22.10 billion) China SSE 50 ETF 510050.SS, to “lower investors’ wealth management cost.”

The management fee would be slashed by 70% to 0.15% from 0.5%, while the custodian fee would be halved to 0.05%.

Fund companies including E Fund Management, Huatai-PineBridge Fund Management, Harvest Fund Management and HuaAn Fund Management made similar statements.

Net inflows into China’s onshore ETFs have exceeded 900 billion yuan so far this year, on track to register the biggest inflows over the past decade, according to BNP Paribas.

China’s stock ETFs, which hit 1.81 trillion yuan at the end of June, have already exceeded 3 trillion yuan. That is a 66% jump in less than five months.

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The boom was partly aided by state funds piling into a struggling market early in the year, and by a flurry of government stimulus measures for the ailing economy in recent month.

The fee cuts will benefit sovereign fund Central Huijin, which holds more than $100 billion worth of ETFs.

Cut-throat competition for market share also helped drive down fees and attract inflows.

Most active funds were caught off guard by China’s sudden, stimulus-led bull run that started in late September, and their conservative positions meant they could not beat the surging indexes.

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An index trading China’s active equity funds (CSI930890) has gained just 3% this year, far lagging the benchmark index CSI300 (CSI300), which has jumped 16%.

“Active fund managers cannot even beat the market, and they have lost trust with investors,” said Lu Deyong, an individual stock trader in northeastern China. “Retail investors now prefer to place their bets via ETFs.”

China’s passive funds last month exceeded active funds in their China stock holdings, according to the official Shanghai Securities News.

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The debate about whether Maurizio Cattelan’s banana duct-taped to a wall installation qualifies as art may be ongoing. But that hasn’t stopped it from selling for millions of dollars at a Sotheby’s art auction in New York.

The winning bidder nabbed the Italian artist’s conceptual artwork, titled “Comedian” and comprised simply of a banana fastened with duct tape to a wall, for a hefty $6.2 million on Wednesday, far surpassing the $120,000 it was sold for at Art Basel Miami Beach in 2019. 

Before the bidding kicked off, the artwork’s value was estimated between $1 million to $1.5 million. It was the first time the artwork was offered at auction, according to Sotheby’s. 

The buyer receives a roll of duct tape and one banana, as well as a certificate of authenticity and official instructions for installing the work, the auction house said.

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While the artwork is small, measuring 20 cm by 20 cm by 5 cm, Sotheby’s head of contemporary art for the Americas, David Galperin, described it as “the most influential and radical artworks of the last century.” 

Galperin said that “Cattelan rocked the foundations of the art world, and brought art to the center of mainstream popular culture.”

In 2019, when Cattelan’s “Comedian” debuted in Miami, it was met with confusion and in some cases, amusement. But the piece gained global attention following its $120,000 price tag at Art Basel. A social media debate quickly ensued about the nature and value of art. 

In December 2019, when Comedian’s installation at Perrotin’s booth was unveiled, Sotheby’s said the crowds were so overwhelming that the artwork had to be de-installed before the end of the fair. All three editions of the artwork were sold. 

Two people at different art installations also reportedly ripped it off the wall and ate it. 

“Widely venerated, and hotly contested – and eaten not only once, but twice – the work headlined news stories shared around the world,” Sotheby’s wrote. 

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Sotheby’s said Cattelan’s Comedian “single handedly prompted the world to reconsider how we define art.”

“We may be in on Cattelan’s joke, but Comedian is anything but,” Sotheby’s wrote. 

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The Perrotin Gallery described the Italian artist as one of the “most popular” and “controversial artists on the contemporary art scene.” 

The gallery said he has a “playful and provocative use of materials, objects, and gestures set in challenging contexts forces commentary and engagement.” 

Galperin told The Associated Press that the winning bidder won’t buy the banana itself, but rather the certificate of authenticity, giving them permission and authority to reproduce the banana and duct tape on their wall as an original artwork by Cattelan. 

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The state of Michigan is on track to allow for the unionization of home health care workers, including caregivers aiding ill and infirm family members, starting next year in a move that critics say would hurt caregivers.

The Democrat-controlled Michigan Legislature passed legislation that was signed by Democratic Gov. Gretchen Whitmer to grant collective bargaining rights to home health care workers. The law, which takes effect at the end of March 2025, would allow the Services Employees International Union (SEIU) to skim dues from funding provided to caregivers under the state’s Home Help program.

Under the law, the roughly 35,000 caregivers in the state of Michigan would be required to attend a training session that would involve the union pitching them on membership. Though the caregivers aren’t required to join the union, they may not be informed of their right to opt out in the course of that training session, which is required as a condition of receiving funds from the Home Help program.

“Here’s the little trick that they’re pulling: They’re making all 35,000 people that do this – and remember, these are people that are caring after extremely sick people, perhaps wheelchair-bound, perhaps unable to travel – and they’re making them come and do training on shampooing, feeding, toileting,” said Patrick Wright, vice president for legal affairs at the Mackinac Center. “At this training, the unions get to lock them in a room for half an hour to try and get them to sign up and join the union.”

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The law is similar to a prior dues skim arrangement that amounted to 2.75% of funds for unionized home care workers that was in effect from 2005 to 2012, which ended when the state’s health department dissolved the arrangement and the legislature ended caregiver unionization. Michigan voters also rejected a 2012 ballot measure backed by the union that would’ve allowed caregivers to collectively bargain.

After the legislature voted this fall to pass the bills bringing back the dues skim, Whitmer said that they will “finally restore the right of more than 30,000 independent provider home health care workers to collectively bargain for better pay and benefits and start to build out the caregiving infrastructure we need to help Michigan families and care for our neighbors who need day-to-day support.” 

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Wright noted that funding for the state’s home care subsidy program rose significantly during the period where caregivers were not unionized, undercutting the argument that they need collective bargaining to get more resources.

“In the 10 years that we had no mandatory union in Michigan, the funding of this program doubled from $300 million to $600 million,” Wright said, adding that the increase was still more than $100 million after accounting for inflation. “The idea that you have to have a union in order for there to be changes in benefits to this program has been belied by one decade’s worth of experience.” 

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He went on to note that the SEIU could rake in millions of dollars from the arrangement that it didn’t have access to prior to the law’s enactment.

“Obviously, the union officers benefit because they get more money. The other entity that benefits is probably politicians – political spending of the SEIU health care went into the toilet in 2012,” Wright said. “Now, if they get 2.75% of $600 million, you’re looking at $13 million and change a year… that presumes all of these people would sign up, that clearly isn’t going to be the case.”

Wright explained that while the Michigan Legislature was drafting the bills, an amendment that would’ve required the unions to inform caregivers about a pair of U.S. Supreme Court rulings that prevent home caregivers from being compelled to pay union dues and allow public sector workers to opt out of paying union dues. 

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However, he said there are concerns the union won’t inform caregivers of those rights in the course of the training session where they’re encouraged to join the union.

He went on to say that the union will have to get 30% of the 35,000 caregivers to sign off on requesting a union election, and if they win, would allow them to sign up members. Wright explained the Mackinac Center plans to continue to oppose the unionization push. 

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The Department of Justice argued on Wednesday that Google must sell its Chrome internet browser after a federal court ruled earlier this year that the company maintained an illegal monopoly over internet searches.

U.S. regulators also argued Google must share data and search results with competitors, among other things, in efforts to end the company’s monopoly, according to Reuters.

“Google’s unlawful behavior has deprived rivals not only of critical distribution channels but also distribution partners who could otherwise enable entry into these markets by competitors in new and innovative ways,” the DOJ said in a court filing.

In August, a judge determined that Google had built an illegal monopoly over internet searches, more than 90% of which are processed through the search engine giant.

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Google has made billion-dollar payments to Apple and other device manufacturers for years to ensure its search engine is the default on smartphones and web browsers to preserve its market share.

The DOJ’s proposed remedies could have a significant impact on how Americans find information on the internet while shrinking Google’s revenues and giving its competitors an opportunity to grow. 

The demands from the DOJ include barring Google from re-entering the browser market for five years, insisting that Google sell its mobile operating sytem for Android if competition isn’t restored, and prohibiting Google from buying or investing in search rivals, query-based AI products or advertising technology, Reuters reported.

Google has called the proposals from the DOJ radical and said it would appeal.

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Google previously warned that selling off Chrome and Android “would break them” because the company currently offers them and their code for free on an open-source basis.

The company will have the opportunity to present its own proposals next month.

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U.S. District Judge Amit Mehta has scheduled a trial on the proposals for April, though that could change once President-elect Donald Trump and his DOJ are in charge.

Reuters contributed to this report.

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Passengers on an American Airlines flight to Dallas Fort Worth International Airport in Texas restrained a man with a Canadian passport using duct tape Tuesday after he allegedly attempted to open a cabin door while in the air, according to reports.

FOX 4 KDFW reported a flight attendant on the flight from Milwaukee told police the man got up in the middle of the flight and told her he “needed to exit the plane immediately.”

The man reportedly grew more agitated and got louder before rushing a 79-year-old female flight attendant to gain access to the cabin door.

Three passengers then rushed to assist the flight attendant while trying to pin the man down. Using duct tape, they were able to restrain the man’s legs and wrists.

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The plane reached its destination just after 10 a.m., when airport police and the FBI boarded the plane.

When they entered the cabin, one of the passengers was still kneeling on the disruptive passenger to prevent him from getting away. He was taken off the plane in a wheelchair.

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The flight attendant reportedly sustained injuries to her wrist and neck in the altercation and was taken to a hospital for treatment.

“The safety and security of our customers and team members is our top priority, and we thank our team members and customers for managing a difficult situation,” American Airlines told Fox News Digital.

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The airline added that the restraint tape used is included in an onboard kit as a safety measure during elevated safety or security situations.

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