CHINA Southern Fund Management Co said yesterday it expected to gain the regulatory nod next month to launch its first product to help clients invest in overseas securities.

The Shenzhen-based fund venture has picked 48 nations as the new product's potential investment venues and plans to buy into foreign stocks and equity-invested funds, it said in a Website statement.

The fund, expected to raise as much as US$1 billion, will invest up to 20 percent of assets in the Hong Kong market as part of bids to diversify risks, media reports said yesterday, citing the firm's general manager Gao Liangyu.

China in July expanded its Qualified Domestic Institutional Investor, or QDII, program to mainland brokers and fund management firms after initially limiting the business to banks and insurers.

Companies must seek separate QDII licenses before they can apply to launch products to invest in overseas securities, according to the regulatory arrangement.

Southern Fund, which has about 190 billion yuan (US$25.1 billion) of assets under management, and China Asset Management received QDII licenses from the securities regulator last month.

Earlier, Harvest Fund Management, partly held by Deutsche Bank, and China International Fund Management Co, part-owned by a unit of JPMorgan, also won licenses.

Before the deregulation, Shanghai-based Hua An Fund Management Co was the only fund firm involved in the QDII scheme with a special approval from the stock regulator.

Hua An won a US$500-million quota in September to pool foreign-currency deposits from local institutions and citizens to buy foreign securities.