Franklin wins mandate to manage ICBC QDII fund

HONG KONG, Nov 26 (Reuters) - Franklin Templeton said on Monday it was picked by Industrial and Commercial Bank of China Ltd (1398.HK: Quote, Profile, Research, Stock Buzz) (601398.SS: Quote, Profile, Research, Stock Buzz) to manage a $475 million overseas-invested fund sold by China's top bank to its local clients.

The deal makes the unit of Franklin Resources Inc (BEN.N: Quote, Profile, Research, Stock Buzz) the latest global asset manager to win business as a result of China's Qualified Domestic Institutional Investor (QDII) scheme, which lets Chinese investors put money to work in foreign markets.

The California-based company, one of the largest publicly traded U.S. asset managers, said it would manage the underlying investments in ICBC's Oriental Pearl III-Prosperity Fund. ICBC raised US$475 million with the launch of the fund.

Oriental Pearl is a fund-of-funds vehicle investing in global fixed-income and equity funds managed by Franklin. These include its Templeton Asian Growth Fund, Templeton BRIC Fund, and Templeton Global Total Return Fund.

A growing number of Chinese financial firms have won approval to launch funds that invest abroad under the country's landmark QDII scheme, which was introduced in April 2006.

In addition to letting domestic residents diversify their investments, the scheme is expected to help relieve some upward pressure on the yuan by promoting capital outflows.

Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) said on Friday its Citibank (China) Co Ltd unit would launch 11 new mutual funds managed by BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz) under the QDII scheme. (Reporting by Jeffrey Hodgson; Editing by Anne Marie Roantree)