The Chinese mainland's fifth fund to invest in overseas equities raised only about one-tenth of the average the previous four products collected as investors exercised caution amid a broad downtrend in overseas markets.
The fund managed by ICBC Credit Suisse Asset Management raised 3.15 billion yuan (US$438 million) during the one-month issuance period which ended on Thursday.
That compared with the average 30 billion yuan raised by four similar equity-investment products unveiled last year under the country's Qualified Domestic Institutional Investor scheme, according to industry data.
"Apparently, investors are shunning investment in overseas equities amid the backdrop of a possible global economic slowdown," said Wu Ke, a Zhongtian Investment Consulting Co analyst. "The volatility of the Hong Kong market and the bad performance of previous QDII products dented investors' appetite."
The Hang Seng China Enterprises Index in Hong Kong plummeted 21.93 percent last month, compared with a 13.45 percent drop on the Shanghai-Shenzhen 300 index.
Chinese authorities issued rules last year to allow financial institutions to pool public capital to invest in international stock markets as part of bid to curb excess liquidity and rein in inflation.
Previously, only banks, insurers and fund firms were allowed to help clients trade bonds and other money-market vehicles overseas.
"The loss of QDII products was mainly due to its asset allocation, which placed heavy positions in markets like Hong Kong," said Zhu Yun and Zhang Shengxian, analysts at Shenyin & Wanguo Securities.
All four QDII funds lagged behind the performance of their benchmarks in the fourth quarter of last year while the products invested up to 80 percent of capital under management in Hong Kong-traded shares at one time, they said.
However, observers said the QDII funds are likely to recover over the next few months due to the potential rebound of regional equity markets and their strategies to shift assets to fixed-income investments.
"It might be a chance for investors to buy into QDII products now as equities are traded at attractive valuations," said Luo Wenhui, an Everbright Securities trader. | |
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