HONG KONG, August 8 — In response to the recent sharp decline in global equity markets, several Chinese funds investing in international securities have relaxed their subscription restrictions. According to recent announcements, at least five funds part of the Qualified Domestic Institutional Investor (QDII) program are now allowing larger investments or have reopened to investor subscriptions.
This adjustment came after a tumultuous start to August, which saw significant market declines wiping out trillions in value globally. Investors, particularly in China, have shown apprehension due to the instability, with a noted decrease in interest towards traditionally popular markets like the U.S. and Japan.
Among those adjusting their policies, Hwabao WP Fund Management’s Nasdaq Selected Equity fund has notably increased the daily purchase limit per account from 20,000 yuan to 100,000 yuan. Similarly, a JPMorgan Asset Management product focusing on offshore mutual funds has also raised its daily investment ceiling from 10,000 yuan to 50,000 yuan.
These changes contrast sharply with the scenario in the first half of the year when such fund shares were scarce. Earlier, a loss of confidence in domestic markets had prompted investors to focus on foreign assets, leading to oversubscription in QDII funds. This surge in interest prompted several funds, including ETFs tracking major indexes like the Nikkei 225 and Nasdaq, to issue risk warnings and restrict new subscriptions to manage the overwhelming demand and to adhere to their near-maxed-out quotas.
The QDII program serves as a critical channel for outbound investments under China’s stringent capital controls, regulated by a quota system overseen by the State Administration of Foreign Exchange (SAFE).
