So, why aren't you investing in China?

In five years, it will have the biggest economy in the world, according to the International Monetary Fund. It has the second most countries in the Fortune Global 500 and boasts an annual GDP growth that puts that of the U.S. and many other developed countries to shame.

So, why aren't more people investing in China?

"I personally find it somewhat shocking that most people have no money allocated to China at all," Aaron Dillon, managing director of Harvest Krane, recently told MFWire.

Dillon and his firm are working to undo the anxieties American investors seem to possess in regards to investing in China.

His company is the American distribution arm of the China-based asset manager Harvest Fund Management, which recently broke into the U.S. with the Harvest Funds Intermediate Bond Fund.

The sales and management team includes Jonathan Krane as chief executive, Aaron Dillon as managing director as well as Simon Arrata, a managing director who also wears that hats of head of sales for Harvest, head of marketing and heading of product development.

Arrata, who was previously a senior vice president at Fidelity Investments, sums up his approach to selling Chinese investments in this way:
The way I am approaching the different channels that we sell into is to bring them something that is completely and utterly differentiate from that the perception of China currently is. Everyone thinks that it is the Wild East of the financial world in terms of risk. It is a very wealthy country. It is the wealthiest among EM countries.
Which is why the Harvest team first came up with an intermediate duration fixed income product for the U.S. market.

Arrata described the rational for the strategy in this way:
We could have gone to market and filed prospectuses and brought to the people the big markets in China, that would have given them coverage to the Shanghai and Shenzen markets. We could have put it in a mutual fund. It would have been great. It would have been flashy.� We didn't do that, because I am trying to bring the right products to meet the right needs in the U.S. In a time when the Chinese economy is going through this interesting transition from exports-based to consumer-based economy. having access to very volatile markets like the A-share markets would not have been attractive to anyone.

We have 72 million people that are ready to retire between today and the next 17-years. You cannot be a 65-plus person and be totally invested in equities. You need a blend of stocks and bonds. The problem though is that due to QE programs, most domestic bonds are not in� apposition to deliver any yield that could be of use to you. To get higher yield, you need to go into junk bonds or take on duration risk that would be completely inappropriate for your needs as a retiree. Instead, I wanted us to deliver a bond fund product that has a different take, an investment grade bond fund, either triple-B or higher quality, and deliver something with short or medium duration. The current average duration is 3.5 years only on our fund.
Arrata said that the product will offer a yield of about 8 percent.

"This is a very different yield compared to most domestic bond funds. It forces you to rethink what is going on in China," he said.

Dillon said that Harvest is looking to launch more funds later in the year. In the meantime, Harvest is marketing itself as fund provider that offers non-traditional products for income, China diversification as well as in-depth expertise and present in the mainland China. He noted that Harvest's investment team is primarily based in Beijing and Hong Kong.

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