China Investment Funds Set to Double
The number of China investment funds that invest overseas is set to double this year to more than 60, despite a lack of retail interest toward products under the Qualified Domestic Institutional Investor (QDII)scheme. Half of China's mutual fund houses have been granted QDII licenses and are likely to launch at least one QDII to take advantage of government support toward outbound investment.
QDII businesses may not be profitable initially, but fund managers view them as long-term and strategic investments. China first launched QDII in late 2007 in order to channel Chinese money overseas, but the program was suspended during the global financial crisis following huge losses. The scheme was revived in 2009 but retail investors, having been burned before, are much more cautious this time about putting money with the funds.