BEIJING, June 23 -- Goldman Sachs Asset Management has launched a US$200 million offshore Chinese equity fund that will invest exclusively in China¡¯s domestic A-share market, the fund manager said Thursday.

    The fund management arm of Goldman Sachs Group Inc. said the Dublin-authorized fund has direct access to the mainland market through the firm¡¯s Qualified Foreign Institutional Investor (QFII) quota.

    A spokeswoman said that the majority of the fund¡¯s investors were institutional, mainly European, Japanese and Asian pension funds, with some high-net worth individuals also participating.

    The fund¡¯s managers are based in Singapore and will use a bottom-up investment approach examining company fundamentals, using research obtained on the ground on the Chinese mainland.

    The fund¡¯s launch came after JF Asset Management, a unit of JPMorgan Chase & Co., launched an A-share fund for Hong Kong retail investors earlier this month which also used its QFII quota to allow for direct investment.

    China initiated the landmark QFII system in 2003, allowing select foreign investors to invest in its main stock and debt markets for the first time.

    Goldman Sachs said there are now 40 approved QFII holders with US$7.15 billion of foreign capital invested in China¡¯s domestic market.

    It said a further US$2.855 billion has been approved by the State Council, but has yet to be released by the State Administration of Foreign Exchange.

(Source: Shenzhen Daily/Agencies)