Hints and tips:
...Public filings show 79 Chinese QDII funds have suspended sales to retail investors and 53 have capped them....
...In addition, Chinese brokerages that sell funds to retail investors through the QDII programme said the Shanghai exchange was cracking down on “abnormal trading”....
...The QDII scheme is part of a wider policy of controlling flows of money in and out of China....
...In addition to QDII funds, several onshore mutual funds that are also heavily exposed to Hong Kong stocks have recorded similar declines in value....
...The expansion of the QDII quota will complement other Hong Kong-linked programmes that allow investment to flow out of China....
...A Safe official in June said the QDII expansion was “conducive for meeting domestic investors’ needs for diversifying overseas asset allocation”....
...The fact that the Shenzhen-listed products are still required to use their QDII quota means mainland managers will want to make maximum use of their chosen investment strategy....
...Launched in 2006, QDII allows Chinese and locally incorporated foreign asset managers to sell overseas invested mutual funds to local investors....
...Local funds can apply for QDII quotas to invest client money abroad, but these totalled only $103bn at the end of October....
...But the foreign exchange regulator has not increased the QDII quota, currently at $90bn, since March 2015....
...As a result, 27 of the 108 QDII funds in existence have been forced to suspend subscriptions, Moody’s says, while a further 47 have suspended large-scale subscriptions....
...Domestic asset managers have also reported that Safe stopped issuing new quotas for the Qualified Domestic Institutional Investor (QDII) licence, allowing local companies to invest abroad....
...Beijing has suspended, for example, several programs that allow Chinese investors to invest abroad, including the vaunted Qualified Domestic Institutional Investor or QDII program....
...Fake invoicing is also back, this time to facilitate outflows, while even official outward-bound cross-border channels are being limited: the Qualified Domestic Institutional Investor (QDII) programme is...
...Quotas granted under QDII totalled $90bn to the end of April. Apart from QDII, current rules allow Chinese residents to convert $50,000 worth of renminbi to foreign currency annually....
...This is mainly because domestic financial institutions must apply for investment quotas under the qualified domestic institutional investor (QDII) programme to issue overseas products and that limits the...
...Though details are scarce, it will be easy to improve on the current QDII program which limits investors to a few Chinese funds and has not been very popular....
...Mutual funds, meanwhile, have long been restricted to buying overseas securities through the qualified domestic institutional investor (QDII) programme....
...We expect further expansion of these “Q” schemes – namely QFII, RQFII and QDII – and the eventual phasing out the quotas....
...The programme has had a hard time attracting investors thanks to its low return – the unit net asset value of China’s QDII funds rose a mere 3 per cent in the first half of this year....
...China’s foreign exchange regulator had granted in total $87bn to Chinese fund managers under QDII by the end of October....
...“But demand for QDII funds is not so great.”...
...While the returns of QDII funds have outpaced the Chinese market in recent years, they struggle to attract assets, unable to salvage reputations that the global financial crisis damaged....
...However, most QDII funds follow active strategies and are cumbersome to trade, involving a lengthy redemption process....
...But over the past three years, overseas markets have outperformed Chinese markets by a big margin and QDII offerings have started to pick up....
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