China Yinhua foreign fund draws record low demand

SHANGHAI, May 27 (Reuters) - The first overseas fund launched by China's Yinhua Fund Management Co attracted a record low amount of investment, as slumping global equities and a strong yuan continued to deter Chinese portfolio investment abroad.

The fund, which began taking subscriptions on April 21, closed subscriptions after raising a total of 417 million yuan ($60.2 million), Yinhua said in a statement on Tuesday.

That was far below the maximum of $2 billion which the fund had intended to raise, targeting both developed and emerging markets around the world and investing no less than 60 percent of the money in overseas mutual funds.

It was the lowest amount raised by a fund in China's Qualified Domestic Institutional Investor (QDII) scheme, which seeks to channel Chinese investors' money abroad. Mutual fund management firms have launched seven QDII funds since last year.

Last September and October, four Chinese QDII funds raised $4 billion each from domestic investors, but the funds have since fallen well below par value because of the turmoil in global markets triggered by the U.S. credit crisis.

Early this month Fortune SGAM Fund Management Co, Societe Generale's (SOGN.PA) China fund unit, closed subscriptions for a new QDII fund after raising just 463 million yuan, the previous record low. ($1 = 6.93 yuan) (Reporting by Helen Ding; Writing by Andrew Torchia; Editing by Edmund Klamann)