BNP China JV plans first mainland-HK fund -sources

SHANGHAI, March 16 (Reuters) - French bank BNP Paribas' (BNPP.PA) China fund venture plans to launch China's first mutual fund that invests in both the Chinese and Hong Kong markets, two sources familiar with the plan said on Tuesday.

The fund, developed by Fortis Haitong Investment Management Co, would invest 60 to 95 percent of its assets in mainland-traded A shares and Hong Kong-listed H shares, with the remainder invested in bank deposits and money market instruments, the sources said.

The fund is awaiting approval from the China Securities Regulatory Commission and it is not clear when it may be launched or how much it will plan to raise.

Mutual funds in China currently invest either in domestic capital markets or in overseas markets under the so-called Qualified Domestic Institutional Investor (QDII) scheme, which allows Chinese individuals to invest abroad.

Fortis Haitong would use its existing QDII quota to buy H shares for the planned fund product, which would allow investors to diversify their holdings more easily. ($1=6.83 Yuan) (Reporting by Samuel Shen, Helen Ding and Edmund Klamann)