"We have been actively working on a plan on new closed-end funds," which will have more investment channels than the previous funds, said Gao Liangyu, general manger at China Southern, in a statement yesterday.

China's stock authority will soon vet applications from big money managers to begin sales of closed-end mutual funds, sources told Shanghai Daily in January.

Issues of closed-end funds were virtually halted in 2001 as the market started to embrace open-end funds.

Closed-end funds have a fixed number of units sold to investors and trade on stock exchanges like normal securities. They usually have a life span of 10 to 15 years before liquidation, during which investments can't be redeemed.

Open-end funds, although not publicly traded, let investors redeem their units after initial lock-up periods. They also pool client capital periodically and invest in more types of equities than closed-end ones.

The new closed-end products may "invest in warrants, asset-backed securities, as well as planned stock-index futures and options," Gao said in the statement. They are now only allowed to buy stocks, bonds and money-market tools.

The closed-end funds will likely "even invest in foreign exchange, real estate and gold," Gao said, without giving a timeframe for the launch of the products.

Fluctuations in China's stock markets have made investors redeem funds whenever declines appeared and prompted industry calls for the re-introduction of closed-end products.

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