The Government's new index tracking investment product will be launched on Monday, amid preliminary indications it may face a tepid reception from SAR and international investors. Brokers from the 16-company retail syndicate were briefed earlier this week on details and the timetable for the Tracker Fund of Hong Kong. According to a document presented to the retail managers and obtained by Business Post , the fund is scheduled for listing on the Stock Exchange of Hong Kong on November 12. The fund was devised by Exchange Fund Investment (EFI) as a way of selling part of the Government's $216 billion stock portfolio, with minimal disruption to the market. The portfolio was acquired during last year's controversial market intervention in an effort to stave off a speculative attack on the Hong Kong dollar. But early indications suggest the response to the units - which will represent the underlying stocks of the 33-constituent Hang Seng Index - may not be as enthusiastic as the Government had hoped. Institutional investors, already approached by joint global co-ordinator Goldman Sachs ahead of the roadshow, are understood to have given a lukewarm response. Feedback from large Singapore-based institutions suggested a lack of appetite for the fund. A poor response from big institutions indicated the Government had been misled over the degree of international demand for the fund, a broker at a retail manager for the syndicate said. One SAR fund manager also questioned the distribution capabilities of some of the joint lead managers, saying they may struggle to sell the fund widely overseas - particularly in the crucial US market. He said Goldman Sachs would have to 'throw its distribution power behind it' in order for the public offering to succeed. 'They really need a Merrill to sell it,' the manager said, referring to the world's biggest investment bank, Merrill Lynch. He warned that SAR investors, historically reluctant to buy index funds, were also suspicious of new products. And that the fact it was initiated by the Government might discourage some investors. However, he said international investors underweight in Asian stocks and reluctant to stock-pick from a distance might be lured to the fund as an easy entry to the Hong Kong market. 'It's going to be all about marketing, how well they sell it,' he said. 'If it doesn't fly in the US, then it's not going to succeed anywhere.' It appears the big winners from the fund could be brokers, who have been offered the attractive commission rate of 3.5 per cent for transactions. Of that amount, 1 per cent will be paid by the purchasing investor. Referring to its potential profitability, one member of the retail manager syndicate said: 'This could be like Japanese covered warrants in the late 1980s.' At that time, dealers made huge profits from brokerage fees because of high turnover of the warrants and mispricing by Japanese investors. Retail investors will be able to purchase up to 300,000 units in the fund. Minimum investment will be 1,000 units. Retail investors who qualify will also be offered loyalty bonus shares for retaining the units for a certain time. Next week's brand launch will be followed by an offer launch on October 24 and a two-week international roadshow the day after, involving EFI, the Hong Kong Monetary Authority and lead fund manager for the syndicate, State Street Global Advisors. Three 'teams' will make presentations to investors in Europe, the US, Tokyo and Singapore in an effort to increase investor support. The date set for pricing of the units is November 8, following the closure of the institutional book on November 5. The Tracker Fund's units will be initially listed on the Stock Exchange of Hong Kong and authorities will later apply to have them quoted on London's SEAQ market. EFI has also devised a 'tap' mechanism, allowing it to feed more units into the fund based on the composition of the Hang Seng Index at the time, and according to demand.