By Wei Wen

GUANGZHOU (Fund China) – Same as fund products, QDII funds and domestic A-share funds compared to some risks are two funds that may exist, such as the investment risk of market volatility, fund management risk and so on. However, because QDII products investment in the number of overseas markets, the overseas markets and the domestic market is not the same market environment and regulatory environment. So there may be some specific offshore market risks. These risks include tax policy risk, exchange rate risk, liquidity risk, and so on.

For example, on the tax situation, investment in the global market, due to the different tax laws and regulations, on dividends, interest, capital gains and other income to the national tax agency to pay taxes, including withholding tax, which could make the assets of the fund returns affected one way. There was no domestic implementation of capital gains tax, but some overseas countries and regions have this tax.

Apart from the tax risk, exchange rate risk is also QDII products investment needs attention. QDII investment products in different markets, these markets are likely to carry out different types of currency valuation and the last QDII will use a currency-denominated. In this process, exchange rate fluctuations will have an impact on the fund’s net.

However, some QDII fund is the main direction of investment in China’s overseas listed companies, this way, actually fund Investment’s major asset is the RMB assets, it can hedge exchange rate risks. For worried that the exchange rate risk QDII fund investors can choose to invest in this type of fund.

Copyright Fund China 2009.

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