Schroders has launched a renminbi fixed income fund investing in Chinese government bonds and renminbi bonds issued by Chinese or foreign companies.
Launched on November 7, the Schroder ISF RMB Fixed Income is actively managed by the asset manager’s Asian fixed income team, led by Rajeev De Mello, head of Asian fixed income, and Angus Hui, Asian fixed income fund manager.
Schroders says the team will build a diversified portfolio expressing their views on the Chinese bond market. They will select maturities along the yield curve and make choices based on sector and company.
Mello says in the current low interest rate environment, offshore renminbi bonds provide a yield of 4% for the overall index and 3.6% for the investment grade non-government sector.
“With now higher yields and a wider investment universe to add value from security selection and relative value rotation, offshore renminbi bonds provide investors with multiple sources of return potential in addition to the currency appreciation,” Mello adds.
The fund uses the HSBC Offshore RMB Investment Grade Bond Total Return Index as a reference.
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