By Charlie Zhu and David Lin
SHANGHAI (Reuters) - JPMorgan's (JPM.N: Quote, Profile, Research, Stock Buzz) China asset management venture is considering raising $1 billion to $2 billion for its first overseas investment fund, a product key for diversifying its business risks, the venture's head said on Wednesday.
China International Fund Management Co won official approval early last month to launch the fund under China's Qualified Domestic Institutional Investor (QDII) scheme, which is aimed at easing upward pressure on the country's currency.
Asked how much the Shanghai-based firm aims to raise for the QDII fund, Chief Executive Mandy Wang told the Reuters China Century Summit: "$1 billion to $2 billion will be manageable."
The company is one of a handful of China-based fund houses to receive approval to launch such funds, which can invest in financial markets around the world. The China International fund will focus on Asia, excluding Japan and Taiwan.
Wang said the QDII scheme would help her company and its clients to diversify their risks because investors so far were predominantly exposed to the country's A-share market, which has risen five-fold in the past two years.
REDEMPTION
There are concerns in China's 2 trillion yuan ($265 billion) mutual fund sector that a sharp A-share correction could trigger massive redemptions, as many of China's millions of fund buyers are first-time investors with little investment experience.
"The QDII product is of crucial importance to us. If we only focus on just one market, it will be hugely risky for our clients as well as the company itself," she said at the summit, held at the Reuters office in Shanghai. Continued...
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