Mumbai: ABN Amro Asset Management (India) filed initial papers with the market regulator on 10 December, to launch an equity fund that would primarily invest in Chinese stocks and mutual funds investing in the world’s fastest growing economy.
ABN Amro China Equity Fund aims to capture the attention of domestic investors who are looking for diversification and money-making opportunities abroad after a multi-year bull run at home.
The fund would invest at least 65% of the assets in Chinese equities or units of China-dedicated funds and the rest in Indian stocks, debt and money market instruments, the fund house said in its offer document.
The benchmark Shanghai stock index rose about 90% till 7 December in 2007, compared with a 44.82% gain of India’s benchmark BSE index.
ABN Amro Mutual Fund already runs a fund that has a mandate to invest about 25-35% of the assets in China.
The firm collected Rs2.55 billion in the fund during its offer in September-October and invested 29.22% of the assets in Chinese stocks at the end of October, data from the fund’s factsheet showed.
Ever since India allowed funds to invest freely in overseas markets last February, gradually raising the total amount the industry could put into foreign stocks to $5 billion, the space has seen a flurry of launches.
A dozen firms in India’s 32-member fund industry offer such products, compared to just two at the start of the year, and many more plan to join the fray. Such schemes’ assets have surged about five times to $2.8 billion from the begining of 2007.