China AMC plans US$1.3 bn QDII fund launch

China Asset Management Co (China AMC) plans to launch its first fund under the qualified domestic institutional investor (QDII) scheme to raise US$1.06-1.32 billion in September, Reuters reported. China AMC is the country's largest mutual fund company, and one of the four state-approved funding houses approved this month to invest domestic clients' money in markets overseas. Although the QDII program is intentionally set up to broaden investment alternatives for local investors, few analysts expect heavy investments into QDII funds as long as the domestic stock market remains bullish and the country's currency further appreciates. Vincent Chan, head of China research at Credit Suisse, said that Chinese financial firms were expected to invest a total of US$21 billion in overseas financial markets over the next 12 to 18 months, with about US$8 billion expected from fund firms and brokerages, which are currently waiting for state approval to launch their own QDII to tap in the country's US$2 trillion in personal savings.