China’s First SRI Fund Close to Launch

Thursday, March 20, 2008

The first Chinese mutual fund to invest in “socially responsible” companies in the country is expected to launch by the end of the month.

Industrial Fund Management last week received government approval for the fund, but was forced to scale back its expected size and delayed its launch to the end of the month because investors were wary of committing their money into an equity fund while stock prices are falling, the Shanghai-based company said.

The fund will invest between 65 to 95 per cent of its money in equity, and up to 30 per cent in bonds. After a spectacular bull run, China’s domestic A-share market peaked last October. Since then, the Shanghai composite index has fallen more than 30 per cent.

“There has been a lot of interest [in the fund] and a lot of our clients are calling us to ask about it, but they are just too concerned about the market’s recent fall,” the company said. It said the fund’s target size would be at least Rmb100m (?6.9m, $14m, ?9m).

Industrial Fund Management said it decided to set up the fund last year after noticing that many Chinese companies were, for the first time, issuing corporate social responsibility reports in addition to their
annual financial results.

It said the fund would not be restricted to a specific area of social responsibility as it was the first such fund in China.

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Source: China’s First SRI Fund Close to Launch (link opens in a new window)