The debut today of the mainland's first state-approved closed-end mutual funds is expected to be well received, according to traders. The Kaiyuan and Jintai funds, each capitalised at two billion yuan (about HK$1.86 billion), sparked strong buying interest among retail investors and attracted subscriptions worth 160 billion yuan in a sale two weeks ago. The funds, maturing in 15 years, were priced at 1.01 yuan per unit. Most traders are looking at a 20 per cent jump on the funds' debut, which is not considered impressive compared with the average for the mainland's new stock issues. The increase would be capped by the lack of track record in the funds' investment performance and of investment behaviour of fund managers during their start-up period, traders said. A Ping An Insurance Co securities official said: 'It will be unrealistic to attach too high a premium on the funds when they have yet to fill out their portfolios. A 20 per cent rise is about the acceptable level.' Neither fund has yet to complete investments to meet the requirement of at least 80 per cent of their assets being invested in stocks and corporate bonds, with the remaining 20 per cent in state bonds. The Shenzhen-listed Kaiyuan Fund, sponsored by China Southern Securities, had bought 170 million yuan worth of stocks and state bonds so far, it announced yesterday. The bulk of its two billion yuan is being left unused. The Shanghai-listed Jintai Fund, sponsored by China Guotai Securities, spent about 400 million yuan on stock and bond investments. Details of their investments will be published quarterly. Traders expect heavy redemptions by punters wishing to take profit on the funds in the first days of trade, despite an equal share of genuine investors who will hold the shares on a long-term basis. International fund managers warned of the potential danger of mainland investors viewing the funds as a means of earning a quick profit instead of long-term accumulation, which they said would run contrary to Beijing's aim to boost market stability and nurture the mainland's fund management industry. However, mainland traders paid little attention to the impact of redemptions. 'I don't think there is too much of a problem with redemptions,' one said. A J & A Securities trader expected the funds to go up 35 per cent, the maximum in the first year, based on the average 30 per cent investment return existing listed mutual funds offered to investors last year. Of the 80 closed-end mutual funds that already operate, about 20 are listed. These funds were set up before Beijing issued provisional regulations governing investment funds last year.