Two Sino-foreign fund management joint ventures have received the go-ahead from Chinese authorities to launch their debut funds. But the timing does not look propitious for raising large amounts of assets.

China International Fund Management, a joint venture between Shanghai International Trust and Investment (Sitico) and JPMorgan Fleming Asset Management, has announced it will launch the CIFM China Advantage Fund - a balanced fund - in the near future, with China Construction Bank its main distributor and custodian.

Everbright-Prumerica Fund Management, a JV between Everbright Securities and Prumerica Financial, will introduce a quantitative fund said to be the first of its kind in China, according to market sources. Calls to the firm were not returned by press time.

Fund houses have little control over the timing of product launches. Their custody distributors and the China Securities Regulatory Commission (CSRC) usually decide that, and product launches occur willy-nilly of market conditions. Getting lucky can bring a windfall. In March, the debut fund for Citic Fund Management and the second offering by Fortis Haitong Investment Management broke records with Rmb13 billion ($1.5 billion) fund IPOs.

Since then, however, equity markets have plunged and recent fund IPOs have raised lacklustre amounts of assets. According to Shanghai-based research firm Z-Ben Advisors, the seven fund IPOs launched in May amounted to only $2.3 billion, versus March's $7.2 billion haul.

However, CIFM and Everbright-Pru can take solace in the fact that the Sino-foreign JVs launching product in May outstripped purely local competitors. Despite the market challenges, Fortune SGAM raised a respectable $630 million while Golden Eagle came in with a record low of $66 million raised.

Their new products may require clever marketing to make an impression, though. The lack of capital market tools in China and regulatory requirements for a 20% minimum allocation to bonds has led to a problematic lack of product differentiation. Faddish ideas can generate some steam, like the respectable debut of so-called guaranteed funds last year.

The CIFM fund is positioning itself as a fund that will invest in listed companies that have "a competitive advantage at an international level". In other words it will invest in the same shortlist of decent names as everyone else.

The quant fund, meanwhile, will use a modelling process to weed out ineligible companies. One problem is that a major source of information, corporate annual reports, provides figures that are of dubious accuracy, which could flaw the fund's selection process, says a source. Other basic criteria such as trading volume and liquidity leave the fund picking the same obvious stocks as CIFM and just about every other fund.

So both fund houses and their distributors will have to rely on slick marketing and effective channel management to penetrate a market where retail and institutional investors have lost their appetite for mutual funds. Success could breathe new life into the funds industry.

Otherwise, all eyes will be on the experienced JV veterans. China Merchants Fund Management, a JV between ING Investment Management and China Merchants Securities, is due to launch a fund in June, while Invesco Great Wall and ABN Amro Xiangcai will hit the markets in July.