CCB Launches China Policy Driven Investment Fund

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China Construction Bank's uncirculated RMB10 banknotes, used for internal training.

Feb. 22 – China Construction Bank has been offering a China investment fund uniquely based on Chinese government policy rather than following the markets. The fund, an asset management “China Policy Driven Fund,” has provided returns of 76.6 percent since its inception and is valued at US$68 million.

Based from the bank’s international division in Hong Kong, the bank’s analysts have examined Chinese government policy in a number of sectors and then chosen stocks in those industries they feel will deliver good earnings. It means on occasion that stocks are picked for inclusion based on their political connections and the viability of policy implementation. The bank, with over 13,000 branches in Mainland China, is also able to use these on the ground resources to pin-point regional policies and make assessments on them. The fund’s top-down approach indicates a new type of fund emerging, where Beijing state policy dictates the performance rather than conventional market wisdom.

China Construction Bank is China’s (and the world’s) second largest bank by capitalization, and also runs a popular China Healthcare Fund. CCB International also has branches in New York, London, Singapore, Seoul and Frankfurt.