BEIJING, Oct. 20 -- Morgan Stanley Investment Management (MSIM), a wholly owned subsidiary of Morgan Stanley, announced Thursday that its first United States registered fund to invest principally in China's A-share market has proven extremely popular.

    The Morgan Stanley China A-Share Fund was sold out within one day before it started trading on Sept. 28 on the New York Stock Exchange, the fund's portfolio managers said Thursday.

    "The fund is currently the only United States registered fund that will invest principally in the A shares of Chinese companies," said Tony Archer, MSIM's Asia-Pacific head.

    According to Archer, the fund is a closed-ended, non-diversified type that sells just to retail investors in the United States. He said that the China Securities Regulatory Commission (CSRC) was quite pleased with this type of fund, as it has a long-term investment strategy in China's A-share market.

    The firm received a QFII (qualified foreign institutional investor) licence from the CSRC in July, and was awarded an investment quota allocation of 200 U.S. dollars million in September by China's State Administration of Foreign Exchange. James Cheng, Morgan Stanley's lead portfolio manager for Asian Equities Strategies, said that the fund had originally been planned to sell within two weeks.

    The fund will normally hold the securities of approximately 25-70 companies in the A-share market. "The size of the company does not count, it is important whether the company can make strong earnings and has cash flow growth potential," he said, adding that he preferred those companies with a potentially huge domestic market.