OVERSEAS funds investing in China's A share market dropped 13.87 percent last month, according to a new report by Lipper & Co.

Funds under the Qualified Foreign Institutional Investor scheme reported an average loss of more than 50 percent in the first eight months of this year while China's benchmark CSI300 Index has tumbled 64 percent in the same period, said the fund research firm.

Equity funds tumbled 12 percent in the period while bond funds, money market funds and capital guaranteed funds bucked the trend, the report said. Only money market funds and bond funds reported a positive income result so far this year, it said.

China's securities regulator sped up approval of QFII applicants last month and six companies got the nod to launch their business, increasing the total amount of qualified investors to 65 which received a US$11 billion quota in total.

The six new investors included ACE INA International Holdings, the corporation running Harvard University in the United States and South Korea's Samsung Investment Trust Management Co.

It was the fastest monthly pace of approvals in nearly four years. The sluggish stock market has driven the securities regulator to bring in more foreign funds to help stabilize stock prices. Funds under the Qualified Domestic Institutional Investor, which invest domestic funds in overseas markets, lost 3.73 percent in August and reported an average loss of 24.98 percent so far this year, Lipper said.

"QDII funds failed to stimulate domestic investors because of a bad issuing time and fluctuated global market, but investors can keep an eye on the positive side - diversification of risks," it said.