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China's First Open-ended Fund Sells Well at Launch
China's first open-ended mutual fund sold well across the country on the day it was launched despite official warnings that such funds can be risky.
Sources with the fund told Xinhua that Chinese investors in the cities of Shanghai, Shenzhen and Xi'an snapped up nearly all of the allotment within the first six hours after it hit the market Tuesday.
Ignoring warnings about risk and the sluggish stock markets, Chinese investors Tuesday flocked to 139 outlets of the Bank of Communications in 13 cities to buy into the three billion yuan (363 million U.S. dollar) worth of open-ended Hua'an Innovation Fund.
In Beijing and Shanghai, some investors waited in lines in front of the bank branches several hours before the business started.
In Shanghai, over 1,000 investors gathered before the Caohejing outlet of the bank's local branch at around 7 a.m., two hours before the outlet opened for business, said a policeman surnamed Suo, who was there maintaining order.
In front of the Bank of Communications branch at Xidan in downtown Beijing, Liu Qing and his wife Song Jie came to the branch Monday night -- nearly 12 hours in advance.
"We have bought some close-ended funds before and our investment on the stock market accounts for only one-fifth of the total financial assets we have," said Liu, who was one about 160 customers for the fund.
Queuing in a line, Liu was followed by Li in his 50s and Zhao Jincheng, 64, who both waited for eight hours for the outlet to open.
The sale of the remaining part of the 3 billion yuan retail subscription value will continue before September 18 as scheduled. Institutional investors can buy two billion yuan earmarked for them on September 19 and 20.
The Chinese Securities Regulatory Commission warned individual investors last week of the risks of buying into open-ended funds.
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