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Thursday May 8, 7:51 PM
SocGen China fund arm's QDII fund draws weak demandSHANGHAI, May 8 (Reuters) - Societe Generale's China fund unit said on Thursday it had launched a new mutual fund for overseas capital market investments after raising 463 million yuan ($66 million) -- only 2.2 percent of its target. Shanghai-based Fortune SGAM Fund Management Co had originally planned to raise up to $3 billion for the new fund, which was launched on Wednesday under China's Qualified Domestic Institutional Investor (QDII) scheme.
The lacklustre sale indicates that domestic investors are still cautious towards investing abroad after a slide in overseas equities markets this year, although SGAM had previously said the fund would initially focus on buying bonds, such as U.S. treasuries, instead of stocks. In September and October of last year, four Chinese QDII funds raised $4 billion each from domestic investors but they have since fallen well below par value due to turmoil in global markets sparked by the U.S. credit crisis. ICBC Credit Suisse Asset Management Co Ltd, Credit Suisse's China fund venture, said early this year it had raised just 3.15 billion yuan ($450 million) for China's fifth QDII fund from a fund-management firm, against a target of $3 billion. SGAM has said its planned QDII fund would be allowed to invest 60 to 95 percent of its proceeds in equities, which would consist mainly of overseas-listed China-related companies. The rest would be invested in high-grade fixed-income products listed in the United States, Singapore and Hong Kong. ($1=7.000 Yuan) (Reporting by Helen Ding; Writing by Lu Jianxin; Editing by Edmund Klamann)
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