China's opening up of financial markets and increasing demands for wealth management may accelerate the expansion of hedge fund investment, said analysts and market insiders at a financial forum in Shanghai on Friday.

Yan Hong, Professor of Finance at Shanghai Advanced Institute of Finance (SAIF) and vice-president of the China Academy of Finance Research (CAFR) said the country's financial reforms, including already-introduced margin trading, stock index futures trading, treasury bond futures trading and soon-to-be introduced options trading will boost development of hedge funds amid increasingly diversified market products.

Chen Jiwu, general manager of V.Stone Investment Management Co. Ltd. said high-net-wealth individuals in China are eyeing various investment opportunities and alternative portfolios may win more attention in the near future.

The combined size of hedge funds in China reached about 200 billion yuan by the end of last year, about four times that by the end of 2010. The combined volume of hedge funds in China may reach one trillion yuan in the next few years, according to researches of CAFR.

SAIF researches showed that stock funds take the largest market share of all funds in China, while bond funds are among the fastest growing categories.