Mutual funds go overseas again with approval in forex

14:36, March 31, 2010      

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With the recovery of overseas market, China's mutual funds are willing to invest in foreign stock markets with the approval of foreign exchange quotas.

Lion Fund and Bank of China Investment Management recently announced they had the go-ahead from the State Administration of Foreign Exchange(SAFE) to invest in foreign securities. Dacheng Fund and CCB Principal Asset Management followed suit, shortly thereafter. According to incomplete statistics, a total of 12 mutual funds got access to foreign exchange investment quotas since the re-release of the foreign exchange quota in September last year. 2.4 billion U.S. dollars of foreign exchange quotas were approved only in March.

Market analysts believe that the overseas stock markets were in a robust boom recently with the Greek fiscal crisis heading toward stabilization and the investors' confidence inspired by the US economic data. Compared with the continuing concussion in the domestic stock market, the attraction of outbound investment enhanced.

The market recovery inspires Chinese mutual funds to invest in overseas. Two companies with approval of forex quotas expressed the willingness of preparing QDII products to enter foreign stock markets. Lion Fund noted that the approval of foreign securities investment amount this time would further improve the development of QDII business and products. Bank of China Investment Management also expressed that the company would do a deep research on major stock markets and enterprises and realize the real global investment so as to promote the coming of new era in QDII business.

Although the mutual funds are busy preparing for overseas investment, Chinese investors do not show their aspiration. A recent survey by cnstock.com showed that more than 70 percent of fund buyers felt optimistic for Chinese stock market and had no interests in buying QDII products.

Analysts said that the investors who had the tough and painful experience for the first try would not dare to try again in foreign stock markets. The reaction of the latest QDII funds will finally depend on their performances. In this point of view, QDII funds still have a long way to go.

By People's Daily Online
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