GF Fund Management has reported that China first index funds tracking US real estate investment trusts (REITs) are set to be introduced in July 2013.
Guangzhou-based GF Fund Management, the asset management division of GF Securities, will launch two funds, one denominated in Yuan and the other in US dollars following the MSCI US REIT Index, which tracks 120 US REITs, reported Global Times.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The two funds will be made available to investors starting from 8 July 2013, the Wall Street Journal reported.
GF Fund Management will invest the funds under China’s qualified domestic institutional investor (QDII) scheme, a capital control program which allows local investment groups to tap foreign financial markets.
GF Chairman Wang Zhiwei said: "The US economy and property market are recovering. It’s a good time for such investment; it will be good to start with tracking an index rather than actively investing in properties or developers’ shares, since we are still new to the foreign market."
Cindy Qu, a cross-border market analyst from Z-Ben Advisors, a Shanghai-based fund investment consultancy, said: "Aside from the attraction of the US real estate market and its promise of high returns, Chinese investment companies are designing products such as these REIT funds as a way to expand their QDII offerings," reported Global Times.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData"Following the global financial crisis in 2008, many QDII vehicles tied to overseas stocks lost their appeal with local investors. Fund companies now are trying to introduce more innovative QDII products in order to reignite investor interest," Qu told Global Times.
REITs are defined as corporate entities that invest in, own and manage real estate or real estate mortgages under US tax laws. Such entities can be publicly traded or privately owned and account for roughly half of US property investment.
