An International Balance Fund has been granted a QDII (Qualified Domestic
Institutional Investors) license by the Chinese government, becoming the first
domestic investment fund to be given such a license.
A QDII license allows domestic institutions and residents to invest money in overseas financial products via mainland commercial banks and other financial institutions.
The latest move brings the number of China's Qualified Domestic Institutional Investors to nine. The other eight are all banks, including the state-owned Bank of China, the Industrial and Commercial Bank of China and Citibank.
With a QDII licence, which is approved by the China Securities Regulatory Commission (CSRC), the Hua An Fund now can accept investment funds in U.S. dollars for overseas investment from Chinese citizens.
The fund will invest in international capital markets such as New York, Tokyo, London and Hong Kong, covering both high and low-risk financial products including shares and bonds.
The other eight QDIIs focus most of their investment in financial products with fixed income in overseas monetary market.
Domestic institutions and individuals can subscribe to the fund with a maximum investment of 5,000 U.S. dollars in a fixed five-year term, said Han Fanghe, general manager of the fund.
A subsidiary company of Lehman Brothers Holdings will take 100 percent responsibility to guarantee the principal.
Hua An Fund Management Co., Ltd, established in June 1998, set up China's first open-ended fund and now manages nine securities investment funds valued at 35 billion yuan, including four closed funds and five open-ended funds.