UK-registered funds investing in China delivered the best returns to British investors in the first half of 2017, according to data released on Thursday by investment research company Morningstar.

The data showed that funds invested in China returned nearly 19 percent to investors on average over the six months to June 30. The China returns were followed by funds investing in the Asia Pacific region, which returned 15 percent, and funds buying small capitalization companies in both Europe and the UK, which returned the same.

Analysts said strong Chinese economic growth relative to stock market values is a key reason for the good returns seen by UK funds.

Danny Dolan, managing director of China Post Global, the international arm of the Chinese fund China Post, said: "The Chinese equity market trades at a discount based on the country's GDP growth, and is quite inexpensive relative to the US and several other developed and emerging markets."

Meanwhile, significant capital account liberalization measures by the Chinese government over the past year allowing foreign investors greater access into the Chinese onshore stock and bonds markets also made it possible for many more overseas funds to buy into China.

These measures include stock and bond market connects, which allow overseas investors to buy Chinese shares via Hong Kong, and relatively relaxed rules for foreign investors' access to China's inter-bank bond market.

Jan Dehn, head of research at the London-based investment management company Ashmore, said: "Steady work done by China to ease access to its markets for foreign investors is so critical," adding that more foreign investment in Chinese stocks is expected, and "first movers will benefit from having exposure (to Chinese shares) while (the technicality of the MSCI inclusion) plays out."

China's SSE Composite Index, a benchmark for Chinese stock market activities, has increased from its index value of 3,135.92 at the beginning of the year to 3272.93 on Thursday, representing a 4.4 percent growth.