Markets

China to launch first fixed-income QDII fund

(Agencies)
Updated: 2010-09-14 16:25

China will launch the first fixed-income overseas investment fund Wednesday, Reuters reported.

Summer Davos 2010 in Tianjin Related readings:  QDII investment limit in Taiwan boosted to $30b E Fund QDII offering to debut next week QDII funds to receive new quotas

Fullgoal Fund Management Co, the Chinese asset management arm of Canada's Bank of Montreal, will launch the new fund under China's Qualified Domestic Institutional Investor plan.

The fund will work as a "fund of funds", with 15 to 20 global bond funds as its core portfolio.

"In the coming one to three years, the global economy will probably grow at a relatively slow pace. It means fewer chances of interest rate hikes, and less pressure for bond funds," Reuters quoted Rebecca Lin, the QDII fund manager, as saying.

Lin also said the fund would focus mainly on bond funds managed by international bond fund giants.

BMO Asset Management Inc will be the overseas adviser, and Barclay Global Aggregate Index will serve as the baseline of the new fund.

About 40 percent of the fund's assets will be invested in the US bond market, with another 30 percent to be invested in the European market and 20 percent in the Asia-Pacific market.