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It's Indian Gurus Vs Chinese Shisyas

Dragon wakes up to the world of open-end funds with the launch of Huaan Innovation Investment Fund on Tuesday

Gargantuan China may have raced ahead of India with faster economic growth and a huge dose of FDI inflows but the neighbour surely lags behind in technology - And now, mutual funds. Tuesday saw the launch of the first open-end mutual fund in the dragon country. Investors in the financial capital of Shanghai are believed to have queued for a chance to subscribe to the Rmb5bn ($600m) Huaan Innovation Investment Fund. China already has a few closed-end funds. However, the launch of the first open-end mutual fund in China could do little to cheer its stock markets.

On the other hand, the first open-end mutual fund in India was launched way back in 1994, when JM Asset Management Company simultaneously launched open-end equity, debt and balanced funds. The Indian fund market today boasts of as many as 314 open-end funds across several categories. In other words, since 1994, one open-end fund has been launched on every eight day! The count does not include various options under a fund. The open-end family also includes a wide range of sectoral and specialty funds, which provide thematic investing or a blend of two or more sectors. The closed-end category holds 260 funds, taking the total count to 574 funds.

The Huaan Innovation Investment Fund, which is being advised by JF Funds in Hong Kong, a unit of JP Morgan Fleming Asset Management, is expected to encourage more professional investment in China's speculative markets. While China has huge savings, there are very few investment opportunities. The open-end fund has been launched even as the Chinese government considers developing stock market indices to allow investments in tracking funds.