Analysis-Chinese investors rush to offshore funds to offset domestic risks
HONG KONG/SHANGHAI -Disillusioned with a weak stock market at home, geopolitical risks and a falling currency, Chinese investors are pouring money into investment products with exposure to overseas assets that will also help diversify their portfolios.
A record 38 QDII funds had been launched this year until August 17, outpacing the 31 funds launched in 2022, Morningstar data shows. Money has been leaving China's shores all year, not just through QDII funds but also its Stock Connect and Bond Connect links with Hong Kong, complicating authorities' efforts to stabilise the yuan and revive confidence.
Tianhong, which is planning new QDII products, obtained a $120 million fresh QDII quota in July, less than it had hoped for. China has already asked domestic lenders to scale back outflows via Bond Connect, sources told Reuters last week. Hot demand has driven the combined size of QDII mutual funds to more than 400 billion yuan by the end of July for the first time, data from the Asset Management Association of China shows. By July, there were a total of 255 QDII mutual funds in the market, according to AMAC.
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