BEIJING, Jan. 24 -- In what is the largest mutual fund sales promotion in China, the Industrial and Commercial Bank of China (ICBC) has teamed up with six major domestic fund management companies to tap the country¡¯s massive US$1.3 trillion in savings sitting in banks facing limited investment options.

    The tie-up allows ICBC, the country¡¯s biggest commercial bank, to sell six different fund products offered by the six fund managers through the bank¡¯s 20,000 sales networks in the country.

    Investors can choose any of the six fund products, which fund managers touted as "tailor-made" for domestic retail investors seeking steady returns while fearing high risk investments.

    The investment period ranges from three to five years and long-term investors are encouraged and offered a discount on subscription fees.

    Every month, investors only need to pay through an ICBC bank account a fixed amount of money to buy the mutual fund they have chosen and the minimum monthly investment is 200 yuan (US$24.15).

    On Friday, an ICBC official in Shenzhen said the service was aimed at meeting the bank's clients' need to invest in China's fledgling, but rapidly growing, mutual fund sector as well as helping nurture the idea of long-term investments. He said the bank planned to partner with more fund management companies to offer its clients a wider array of investment options.

    Analysts said the service could reduce high redemption rates, which once plagued the country's six-year-old, US$40 billion fund management industry, as investors were only allowed to redeem their investment at a fixed amount and after a set time.

    The mutual fund sales promotion comes as the once red-hot fund management industry is showing signs of a growth slowdown, partly hit by a protracted weak domestic securities market that tumbled to a six-year low last week.

    BOC International Investment Managers, a fund management joint venture between U.S. investment bank giant Merrill Lynch & Co. and Bank of China International, which is an arm of China¡¯s top foreign exchange lender Bank of China, said earlier this month it managed to rake in just 1.063 billion yuan from Nov. 18 to Dec. 28, less than half the anticipated amount.

    The domestic fund industry saw rapid growth in the first half of last year amid official policy support and the number of fund investors is roughly estimated at 5 million.

(Source: Shenzhen Daily)