China’s First QDII Fund Targeting Indian Market in 10 Years Goes on Sale

China’s First QDII Fund Targeting Indian Market in 10 Years Goes on Sale

Liao Shumin

Date: Thu, 05/17/2018 - 19:23 / source:Yicai
China’s First QDII Fund Targeting Indian Market in 10 Years Goes on Sale
China’s First QDII Fund Targeting Indian Market in 10 Years Goes on Sale

(Yicai Global) May 17 -- A fund targeting the Indian market has drawn the sector’s gaze shortly after China’s State Administration of Foreign Exchange announced USD8.3 billion in new quotas for qualified foreign institutional investors (QFII) late last month. A list of new funds now awaiting approval also includes two that target the Indian market, China’s first QDII fund to target its giant neighbor’s market in the past 10 years.

ICBC Credit Suisse Indian Market Securities Investment Fund is China’s first publicly-offered fund that specifically invests in the Indian market. Approved in mid-March after applying last October, it is a fund of funds (FOF). ICBC Credit Suisse Asset Management Co. is its manager.

The fund invests in India-related exchange-traded funds swapped on over 20 exchanges around the world and favors large products with low transactions costs and management fees, Zhang Yun, general manager of ICBC Index Investment Center, told 21st Century Business Herald yesterday. Based on historical simulated portfolios, the top 10 constituent funds have a combined weighting of 90.3 percent, he said.

The fund’s offering period is from May 7 to May 25, just three weeks, per the announcement of its issuance. Fund sales have been mixed since last year. Though sales of some are robust, many have encountered difficulties in issuance. The less-than one month offering period demonstrates ICBC Credit Suisse’s confidence in its issuance, however.

Investing in the Indian stock market is nothing new. The CIFM Asia Pacific Advantage Mixed Securities Investment Fund, one of the first batch of QDII funds launched in 2007, invested in the Indian market soon after its formation. Its investments in the Indian stock market made up 2.4 percent of its net asset value at the time, its 2008 annual report shows.

Several other funds have also invested in the Indian stock market, though such investments usually account for less than 5 percent of their net value.

Editor: Ben Armour

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Keywords: QDII, India Market, FOF