Fund: HK stocks still attractive options

The first mutual fund based in the Chinese mainland that has gained access to the Shanghai-Hong Kong Stock Connect program said that stocks in the city are still cheap, even after surging to seven-year highs.

Mainland shares listed in Hong Kong will probably outperform their mainland-listed counterparts because valuations are lower, said Linda Xie, the manager of the IGW China-HK Selected Equity Fund, which raised 11 billion yuan ($1.78 billion) in 19 days after opening it to investors on March 26.

Dual-listed stocks on Chinese exchanges are about 25 percent more expensive than those in Hong Kong, according to the Hang Seng China AH Premium Index.