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Chinese investors will double the amount of money they have in mutual funds by 2009, with assets rising to US$92 billion, according to Cerulli Associates.

Mutual fund assets in the world's most populous nation will grow about 19 percent a year from the US$42 billion managed at the end of June, the Boston-based consulting firm said. That’s faster than growth in India, where a 9 percent annual expansion of assets will rise to US$52 billion from US$38 billion over the same period.

Banks are encouraging clients in China, whose population has US$1.5 trillion in personal savings, to move their money into more profitable mutual funds from deposit accounts, Cerulli said.

“They are sitting on piles of deposits,” Cerulli analyst Shiv Taneja said in a telephone interview Tuesday. “It is also coming off a relatively low base.”

The share of China’s fund market held by foreign companies declined to 22 percent from almost 30 percent over the past year, said Taneja. Non-Chinese fund companies can only operate in the country through joint ventures with local companies.

Stock funds sold by joint ventures proved less popular because of lagging stock market performance than the money-market funds sold primarily by local fund management firms, the report said. The Shanghai Composite Index declined 17 percent over the past year.

There are 17 joint fund management ventures in China, including a cooperation between China’s Haitong and Brussels-based Fortis.