Pioneer Guotai Junan Allianz Fund Management plans to launch the first of a series of mutual funds in China in April next year, according to chief executive Hsien Chiang. The Sino-foreign joint venture between Guotai Junan Securities and German financial giant Allianz Group was the first to win approval to set up a fund management company in China. Mr Hsien said the venture was awaiting a formal licence from the China Securities Regulatory Commission, to be granted in the next couple of months, to set up an office in Shanghai. He hoped to recruit about 100 staff for the office. The joint venture aimed to launch five to six funds in the next two years, with the first planned for April, subject to commission approval. Mr Hsien said the first offering would be a balanced fund investing in equities and fixed-income markets. China has placed many restrictions on fund products. For example, funds launched in the country must be sold to mainlanders only and are restricted to investing in mainland stocks and fixed-income markets. Despite these restrictions, Mr Hsien is optimistic about the mainland fund market. 'China investors now mainly invest in stocks and bank deposits. A mutual-fund launch will be an alternative for them,' he said. China now has only 61 funds managed by domestic fund houses, with total assets of 120 billion yuan (about HK$112.46 billion), which Mr Hsien said represented only 1 per cent of the mainland's gross domestic product, compared with 80 per cent in the United States. He said Allianz would bring international experience in fund product design and marketing, while Guotai Junan Securities could sell the funds through its nationwide branch network. With about US$1 trillion under management, Allianz ranks among the five biggest asset management firms globally. Allianz will take 33 per cent of the 100-million-yuan venture, the highest stake a foreign investor is allowed to hold under Chinese regulations. Chief marketing officer Mark Konyn said it would probably launch funds in China through an initial public offering as that would be suitable for mainlanders.