Citigroup Global Transaction Services has bought an undisclosed amount of units of an index mutual fund, Boshi Yufu Index Fund, and in the process became the first Qualified Foreign Institutional Investor to buy mutual funds in China.

The Boshi Yufu Index Fund, an open-end mutual, mimics the movement in Xinhua Fushi A200 Index. The A200 index tracks trading of the top 200 listed firms on the Shanghai and Shenzhen stock exchanges in terms of market capitalization, which accounts for nearly 45 percent of the market value of the two bourses on a combined basis.

"The fund is the sole index fund in China that tracks shares trading on both Shanghai and Shenzhen stock markets," said Li Quan, vice president of Boshi Fund Manage-ment. "The wide coverage matches the requirements of the QFII."

The Boshi index fund, which has already netted 2.74 billion yuan (US$330 million) so far, is available for sale to the public until tomorrow.

Citigroup has been approved by the State Administration of Foreign Exchange for an investment quota of US$75 million under the scheme which allows foreign investors to purchase A shares.