JPMorgan plans to offer its first overseas mutual fund through its joint venture in China next week.
It will be the first mutual fund available in China to focus on the Asia-Pacific ex-Japan region, investing in Australia, South Korea, India and Singapore.
The firm has applied to China’s foreign exchange regulator to obtain an investment quota, which, some sources say, is $5 billion.
Last week, Harvest Fund Management, of which Deutsche Bank owns 20%, launched a global stock fund, for which it hopes to raise $4 billion. Last month, China Southern Fund Management and China Asset Management each raised $4 billion for their overseas stock funds. With demand for overseas funds exceeding expectations, asset management firms are planning to launch at least a dozen more overseas funds next year.
Investors in China are now allowed to invest a limited amount of money in foreign securities markets through the Qualified Domestic Institutional Investor rule that was announced in April 2006 and expanded this past May to include stocks.
The rule allows investors to invest in foreign securities markets via certain fund management institutions, insurance companies, securities companies and other assets management institutions that have been approved by the China Securities Regulatory Commission.
JPMorgan estimates that $90 billion of Chinese money will be invested in global markets over the next year through the Qualified Domestic Institutional Investor rule.