HSBC Global Asset Management has launched a Chinese Renminbi (RMB) fixed income mutual fund for US investors.
The HSBC RMB Fixed Income Fund aims to provide US investors the opportunity to access China’s rapidly growing offshore bond market as well as to participate in any potential appreciation in China’s currency. The objective of the Fund is to maximise total return, comprised of both capital appreciation and income, by investing principally in fixed income securities that provide exposure to the RMB.
The Fund is managed by HSBC Global Asset Management’s Hong-Kong based Asian Fixed Income team, which manages a total of USD29.921 billion in Asian fixed income investments. The team is headed by Cecilia Chan who has managed Asian fixed income assets at HSBC for 18 years.
Chan says: “The investment case for the offshore RMB bond market is compelling, given competitive yields and the long-term potential for the RMB currency to appreciate. We think that the internationalization of the RMB will continue to be an important theme for many years to come.”
The offshore RMB bond market, often referred to as the “Dim Sum bond” market, has grown very rapidly since the middle of 2010 when legislation was passed in China and Hong Kong, allowing a wide range of institutions to issue bonds denominated in China’s currency. Today, the offshore RMB bond market is already valued at RMB273 billion (USD42.9 billion).
Christian Deseglise, Head of Sales in the Americas for HSBC Global Asset Management, says: “As China is a global economic powerhouse, we expect its bond market to become one of the most important in the world. In addition, the Renminbi has the potential to become one of the world’s major currencies. We expect allocations to RMB fixed income to increase substantially in the future.”
He says: “The unique nature of this market is enticing to investors wishing to geographically diversify their risk while also gaining exposure to the world’s second largest economy and its currency. The HSBC RMB Fixed Income Fund brings HSBC Global Asset Management’s experience and expertise in managing Asian fixed income to US investors in a straightforward way.”