The value of funds under the Qualified Foreign Institutional Investor scheme dropped 12.93 percent last month due to stock drops amid concerns over a worldwide economic slump, according to the Lipper Fund Market Insight Report released yesterday.

The decline compared with the average slump of 11.62 percent for domestic A-share mutual funds, according to Lipper.

The 20 QFII fund management firms tracked by Lipper reported that assets shrank to US$7.68 billion in January partly due to a massive withdrawal by cautious investors.

Business sentiment was hurt greatly, with all major stock markets going down. The Chinese mainland bourses, which gave stellar performances last year, might continue to be fragile, said Lipper, a fund-analysis unit of Reuters.

"Don't miss the chance to cash-out on the market," suggested Zhou Liang, China research head at Lipper. "When the market is so volatile, it is most safe to keep the money in the pocket."

Hang Seng's China Enterprises Index plummeted 21.93 percent and the Shanghai-Shenzhen 300 index dropped 13.45 percent in January.

Meanwhile, the six-month return of QFII funds was 3.68 percent, almost the same as the Shanghai-Shenzhen 300 index, according to Lipper.

(Shanghai Daily February 14, 2008)