This year has already seen a significant development in the number of firms offering such services to their clients from an offshore financial center. Julius Baer, however, is the first and only private bank to have obtained the Qualified Foreign Institutional Investor (QFII) license, which was granted to the bank by the Administration of Foreign Exchange in China (SAFE) in December 2010. As a QFII holder, the bank is granted a $100 million quota for direct investment in China onshore equity and bond markets. Consequently, Julius Baer is poised to give overseas investors immediate access to Chinese domestic growth.
The Cayman Islands domiciled fund will offer access to A-shares, a market not available to many of the other China funds set up by foreign financial investment firms. In a company press release on August 17, Mr. Kenneth Ho, Head of Products Asia Pacific, said e are in a unique position as a private bank to provide our clients globally with the opportunity to invest directly onshore in China, a market which is growing rapidly and offers so many interesting options for investors. China economic growth remains above-trend and retains strong fundamentals, representing a key driver of global economic growth, despite recent tightening measures. We believe the renminbi will further appreciate this year
On the benefits of the share-types the fund will buy into, he said -shares provide attractive diversification benefits for investors due to their low correlation to other global markets. Both A- and H-share premiums have contracted to historically low levels, meaning that valuations are now reasonable. We anticipate a very high demand for this fund both now and long-term. /p>
The Swiss private bank recently released its first sia Wealth Report in which it estimated that China and India together will contribute more than 40 percent of worldwide economic growth for the years 2011 and 2012. The China fund is the bank latest move to further increase its Asia exposure, after its office in Hong Kong was upgraded into a fully licensed bank branch by the Hong Kong Monetary Authority late last year. The 120 year old bank is set to open its Shanghai representative office this year, pending regulatory approval. Additionally, it is awaiting approval on its license to open a trust company in Singapore, which it is also set to obtain within the year.
