THE Industrial and Commercial Bank of China Ltd (stock code: 601398) has raised 4.45 billion yuan (US$585 million) to create the country's biggest fund that allows domestic investors to buy securities abroad.

The Beijing-based bank completed sales for China's first equity fund under the Qualified Domestic Institutional Investor program on Sunday, ICBC said in a statement yesterday.

"The product was well received by investors," ICBC said.

"The bank plans another fund specializing in stocks abroad this month."

ICBC's fund will invest half of its assets in China-related stocks in Hong Kong and the other half in high-yield bonds and money-market products across Asia to hedge against fluctuations in the yuan.

Clients have to invest at least 300,000 yuan in the product.

Banks have been allowed to use the QDII program since May to pool client assets for investment overseas, extending investment scope from fixed-income and money-market products.

The move is part of the government's efforts to cool the domestic stock market by diverting funds elsewhere and opening more channels for the country's US$1.2 trillion in foreign exchange reserves.

Previous QDII products received a lukewarm response from investors because of soaring returns on the Chinese stock markets.