What does QDII mean?

QDII stands for Qualified Domestic Institutional Investor, which is a designation given to Chinese institutional investors that are allowed to invest in foreign financial markets. This program was established by the Chinese government to encourage the diversification of domestic investment portfolios and to promote the internationalization of the Chinese currency, the renminbi. QDII funds are typically managed by Chinese financial institutions and are subject to regulations and quotas set by the government. These funds can invest in a wide range of foreign assets, including stocks, bonds, and other financial instruments. By allowing domestic investors to access international markets, the QDII program aims to provide opportunities for higher returns and risk diversification. However, the QDII program also comes with certain restrictions and requirements, such as minimum investment thresholds and limits on the amount of capital that can be transferred abroad. Additionally, QDII funds are subject to currency exchange rate fluctuations and other risks associated with investing in foreign markets. Overall, QDII plays a significant role in the global financial landscape by facilitating the flow of capital between China and other countries, and by providing Chinese investors with access to a wider range of investment opportunities.