"I even dream of the K curve at nights," Li said. Li noted that almost all investors judge company performances before they buy a fund. "When people are buying stocks, they don't care which stock market they are into. Essentially, a good company will perform well anywhere. For instance, if Microsoft were listed in the New York stock exchange, it would be as successful as it is in the NASDAQ."

Wang Jian said that the high yields of funds last year have spurred the interest of many retail investors who believe they will make a fortune. "If they think the stock market is about to restructure, the first thought of these investors could be to redeem their funds," said Wang. "Apart from these speculators, many senior citizens are known to spend all their life savings on funds with the mistaken belief that a fund is a kind of deposit with high interest returns.

"These people lack the ability to resist risks-the only thing they want is to get more money. Since the current social security system is not perfect, the huge influx of this kind of money will probably have negative affects on the stock market and social stability."

The Harvest Strategic Growth Fund once had 50 billion yuan in assets under management, but its holdings were reduced to 30 billion yuan due to a sell-of by fund holders discontent with low returns. The portfolio value of the fund was only 1.11 yuan in early April, far behind that of other funds.

The company is optimistic about the fund's future, but investors aren't buying into such optimism. Many of them have redeemed their funds, saying they bought Harvest Strategic Growth because of the outstanding performance of another Harvest family fund, Harvest Growth. "Since the new fund didn't meet our expectations, we left," an investor said.

"The issuance of new funds provides more capital and also breeds lots of potential speculators," Li said, "Although many companies are overvalued, some fund managers will still buy their stocks, because they are afraid of leaving behind a booming period of that stock."

Li said investors are very shortsighted. They keep a close eye on the yield rating and they will pullout if a fund has not performed well and don't care about the long-term development trend of the fund. Yet Li's concern cannot change the fund buyers' decision.