After "dim sum" bonds and offshore yuan deposits in Hong Kong, now comes the turn of yuan-denominated units in mutual funds. European money manager Amundi Asset Management and DBS Bank are leading the way with renminbi-denominated units in their funds, providing a new investment channel to investors holding the Chinese currency.
Making a yuan share class available on funds whose underlying assets are not denominated in the Chinese currency encourages international use of the yuan and also opens up a potential lucrative investor base for these funds. "We see the demand increasing for yuan investments both from institutional and retail investors," said Zhong Xiaofeng, Chief Executive Officer of Amundi North Asia. The yuan share class in Amundi's newly-launched equity dividend fund will invest in stocks in the Asia-Pacific region.
DBS Bank (Hong Kong) said last week it had launched the RMB-hedged share class of the Schroder Asian Asset Income Fund, providing investors access to an Asian-centric asset allocation. As China prepares to promote the numerous free trade zones on the mainland to boost global use of its currency, Hong Kong is making efforts to launch new products to keep its edge intact while promoting itself as a global money management hub. Growing dim sum bonds, named after the bite-size delicacies served in Hong Kong teahouses, saw not only the first issue from a foreign regional government, but a debut of a floating-rate bond with reference to the newly-launched CNH Hibor this month.
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