Following its approved QDII status, China Universal Asset Management says it is partnering with Capital International to design its up-and-coming overseas investment fund for Chinese investors. Capital International will also advise China Universal on its management structures, investment process, company research, risk management and investor education.

Established in 2004, China Universal is one of the younger fund houses in the China fund industry. It has its roots as the asset management arm of the cash-rich China Eastern Airlines, which later partnered with local brokerage Orient Securities and the publishing group Wenhui-Xinmin United Press Group to form the business.

China UniversalÆs CIO Herbert Zhang was previously a top-ranked manager from Fullgoal Asset Management, a joint venture of Royal Bank of Canada in the mainland. Head of research William Han joined from one of the mainlandÆs largest brokerage Guotai Junan Securities, and runs research efforts in GTJA Allianz Funds, as well as Ping An Asset Management.

Its Harvard-educated CEO Andy Lin says he is optimistic on the outlook for QDII developments.

ôManaging investor expection in 2008 would be a key challenge following the gains of 2006 and 2007," he says. "After the recent corrections in the overseas market, QDII funds will be better positioned to seek gains next year. The recent market turmoils would not impede the overall developments for QDII. Of this, I am positive for outlook next year.ö

Lin says he is happy to collaborate with one of the worldÆs oldest and more reputable fund houses to design a new QDII product. "We will be focusing on Asia because of its proximity, and the Hong Kong market is still looking very attractively priced.ö He does not exclude the possibility of including oversesas-listed Chinese stocks. Singapore, New Zealand and Australia would be other key markets of interest.

Lin says he is unable to diverge more of the fund's details prior to gaining The China Securities Regulatory CommissionÆs product approval.

Meanwhile, China Universal has set up a research institute together with the Shanghai University of Finance & Economics. It aims to groom quantitative financial professionals that are in serious shortage in China. Recent turnover in the China asset management industry is said to be as high as 40%. Salaries in the industry have soared in line with the rise of the China A-share market.

Capital International was set up in the US in 1931 at the heels of the stock market crash of 1929. It is one of the oldest asset management houses in the world. As of June 2007, it managed $314 billion for institutional clients globally. Of the ten largest mutual funds in America, seven are attributed to its parent Capital Group.