China’s Safe launches new QDII initiatives
28 August 2013
By Hui Ching-hoo
The State Administration of Foreign Exchange (Safe) unveiled new initiatives on Tuesday (August 17) that loosen requirements on capital inflows and outflows relating to qualified domestic institutional investor (QDII) funds.
Safe said QDII funds investing abroad on behalf of their clients can use whatever foreign currencies they want, while the application process for foreign exchange quotas will be simplified, according to a report from Reuters. The measures have been taken to encourage the expansion of QDII funds’ overseas securities investment allocations.
A Safe official told local media that the measures will also simplify foreign exchange settlement processes, noting that it is pushing ahead with the QDII scheme in order to accommodate Mainland investors’ growing demands for overseas equities.
Hit by the volatile global economy, the year-to-date returns of many QDII funds remain in the red, even though many funds relating to key segments including gold, energy and resources, and luxury goods displayed signs of recovery in July. Notably, the China Universal Gold and Precious Metal QDII Fund, the E Fund S&P Global Luxury Index Enhanced Fund, and Lion Fund Management Global Gold QDII Fund topped their peers with monthly returns of over 7% in July, according to figures from fund website howbuy.com.
A total of eight QDII funds have been launched in China so far this year. Average fundraising for each fund has amounted to 628 million RMB (US$99.6 million). In full year 2012, 23 QDII funds were listed, with average fundraising of 843 million RMB.
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