QDII funds see heavy losses

According to the latest figures, China's QDII funds, which were highly anticipated at the beginning, have witnessed heavy losses of nearly 10 billion yuan. Experts say the current situation shows that the QDII funds weren't the hedging tool investors thought they would be.

The four QDII funds, issued by China Southern Fund, China AMC Fund, Harvest Fund and China International Fund, have all suffered losses, ranging from 5 to more than 10 percent. Relative to their original value, four billion US dollars each, the four funds have lost more than 1.3 billion US dollars in total. That's equal to about 10 billion yuan.

Hu Lifeng, chief fund analyst of China Galaxy Securities said "Such a heavy slump in such a short period of time is really unexpected. Generally speaking, it should take a certain period of time for this kind of fund to build up its portfolio. But actually, they didn't. They bought in stocks very quickly. And this means they didn't properly decentralize their risks."

The four QDII funds were set up between September 9th and October 22nd. Normally, it take three months to half a year for funds to choose their portfolio.

Insiders say the funds' impatience in purchasing stocks and the market slides due to the sub-mortgage crisis are major reasons for the slump of the QDII funds. But they also indicate that QDII managers didn't use related derivative products to hedge their risks.

Experts say the losses by the QDII funds is reminding investors that risks always accompany investments, even those in mature, overseas markets.

Editor:Xiong Qu