China experiments with managed funds
The first managed fund to begin operating in the massive Chinese market will open to business tomorrow, starting a new experiment in investing for the Eastern giant.
The US$600 million Huaan Innovation Investment Fund will be open to investors tomorrow, launched through the Bank of Communications in 200 branches throughout 13 cities in China.
The fund will be the product of a partnership between JF Funds in Hong Kong which is a unit of JP Morgan Fleming Asset Management, and Huaan Fund Management, which began its life as one of the first funds management companies to be set up after regulations were passed in 1998 paving the way for a funds management market.
According to media reports, the launch of the fund will be watched closely by Chinese government officials and institutional investors and is widely regarded as a litmus test for managed funds n the Chinese investment market, which is otherwise plagued by volatility and the speculation of rampant price manipulation by colluding Chinese fund managers.
Chairman of China Securities Regulatory Commission Zhou Xiaochuan has emphasised how important the launch of the fund is to the Chinese financial markets stating that the local managed funds industry must develop further according toFT.com
But Chinese Government officials appear to have adopted a wait-and-see approach, with the main concern that new financial products could lead to further speculation.
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