HSBC Global Asset Management is to launch a fixed income fund to enable investors access to renminbi investments.
The HSBC GIF RMB Fixed Income fund is managed by the Hong Kong-based Asian fixed income team.
Cecilia Chan, who heads the team, says the investment case for the renminbi is “powerful” against the backdrop of a potential currency appreciation.
“The Chinese authorities have allowed a managed appreciation of the currency to cool the economy and to ease international relations with trading partners who objected to the advantageous terms of trade that a weak Renminbi has meant for China,” she says. “This process still has further to go.”
The new fund will focus on offshore renminbi-denominated instruments, including bonds and deposits. Asset allocation will vary, depending on opportunities in the market and regulatory changes.
Chan says the market is characterised by shorter duration instruments and the average duration of the fund is therefore likely to range between one and three years. The team will aim to keep the credit exposure diversified by combining a top down and bottom up approach.
As part of HSBC’s Luxembourg-based Global Investment Fund Sicav range, the new fund will be registered for sale across Europe, with both retail and institutional share classes.
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