China’s top State-run bank launches first India-dedicated investment fund

The Industrial and Commercial Bank of China, a top State-run Chinese bank, has launched China’s first India-dedicated publicly offered investment fund, saying the Indian market offers the “best opportunity” for Chinese investors due to the prospects of double-digit growth.

The ICBC is China’s largest lender by market value.

The fund named the Industrial and Commercial Bank of China Credit Suisse India Market Fund, will “invest in exchange-traded funds listed on more than 20 exchanges in Europe and the US that are based on the Indian market.”

It is China’s first publicly offered fund for investing in India, State-run Global Times reported.

The fund will invest in the future of the Indian economy and track the distribution of the industrial structure across the Indian market, the report quoted a fund manager as saying.

The move, regarded as significant by observers to boost investments in India, comes just about a fortnight after the first ever informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping at Wuhan.

The bank while launching the fund has given an upbeat picture of India’s economic growth path.

The bank listed sectors for investments specifically, in terms of the major industries weighted distribution of the index.

The financial industry will account for the highest proportion, followed by information technology, alternative consumption, energy, essential consumption, raw materials, medicine, healthcare and other industries, it said.

For large investors, adding a low-relevant asset to the allocation tool can effectively improve the effective frontier of the investor’s asset allocation, and help the investor to better spread risks and obtain a more stable income.

In terms of small and medium-sized investors, the threshold for global asset allocation and overseas investment markets is high, which makes it difficult for them to set foot in this field, it said.

Under the current institutional framework, this is a rare opportunity to invest overseas, it said.

Recent research indicates that the Indian market has gradually become one of the best-performing markets in the world due to ongoing reforms, macroeconomic improvement, and enhanced profitability, it said.

 

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