China's first foreign-currency denominated fund for domestic investors was launched last week. The move is a result of further market liberalization under the Qualified Domestic Institutional Investor scheme which has opened the door to overseas products.
The Hua An International Balanced Fund is linked to the performance of global investment strategies via principal-protected structured notes issued by Lehman Brothers. It is managed by Hua An Fund Management Co. through an arrangement with Lehman Brothers Asset Management. Hua An recently received a USD500 million quota to invest overseas through the QDII scheme, according to local media reports. Jonathan Wharton, spokesman for Lehman in Hong Kong, and officials at Hua An in Shanghai declined comment regarding the structuring of the deal.
With the walls coming down for foreign investments in China firms including HSBC (DW, 8/25) and ABN AMRO (DW, 9/1) have launched a handful of foreign-currency denominated retail structured notes.
