China Southern Fund, S&P ink agreement on index products

China Southern Fund Management has signed an agreement with Standard & Poor’s to jointly develop overseas investment products, Reuters reported, citing state media. The two companies will develop funds under China’s Qualified Domestic Institutional Investor (QDII) scheme that track the S&P 500 stock index. The new agreement will give mainland investors exposure to a range of US blue chip stocks. China Southern Fund Management reportedly chose the S&P 500 because the companies represented by the index account for 75% of total US market capitalization. The QDII scheme, which was launched in 2006, has placed more than US$40 billion of China’s estimated US$2 trillion in household savings in overseas markets.