Last updated: 15:08 / Thursday, 25 September 2014
RMB high yield market

BOCHK AM and Citi Jointly Launch Renminbi High Yield Bond UCITS Fund

BOCHK AM and Citi Jointly Launch Renminbi High Yield Bond UCITS Fund
  • Innovative investment solution targeting wide investor base
  • Capitalizes on the ongoing internationalization of Renminbi (“RMB”)
  • Builds on growing importance of Luxembourg as a key RMB centre

Bank of China (Hong Kong) Asset Management  (BOCHK AM) and Citigroup Global Markets have jointly launched the BOCHK RMB High Yield Bond Fund. This is BOCHK’s first Renminbi (RMB) high yield bond UCITS Fund registered in Luxembourg. The Fund aims to generate long-term capital growth and income by investing mainly in debt securities which are either denominated in RMB, hedged to this currency or have other exposure to this currency, giving investors the potential for investment returns from RMB fixed income investments and RMB currency appreciation.

BOCHK AM is one of the largest active RMB fund managers globally, with discretionary and advisory mandates of USD 7.7 billion. BOCHK AM first launched an RMB high yield bond fund in August 2011, which has produced an average return of 15.2% per annum over the past 3 years. Citi’s Markets and Securities Services business has collaborated with BOCHK AM to launch the new UCITS Fund. Citi and BOCHK AM will act as the Fund’s distributors, while BOCHK AM will take the role of investment manager, and Citibank International (Luxembourg Branch) is the Fund’s administrator and custodian.

The Fund benefits from BOCHK AM’s expertise and experience in investing in the RMB high yield market, leveraging BOCHK AM’s onshore and offshore China market insights. BOCHK AM has the full support of Bank of China (Hong Kong) Limited, the sole RMB clearing bank and a major RMB participating bank in Hong Kong. The Fund provides a highly liquid solution for those investors looking to deploy capital into the growing RMB markets and seeking participation in the ongoing internationalization of the currency. The Fund also builds on the growing importance of Luxembourg as a key investment centre for RMB, with RMB262 billion5 (USD42 billion) of assets held in Luxembourg-domiciled funds linked to RMB.

The Bank of China Group has been present in Luxembourg since 1991. Citi first opened for business in Luxembourg in 1970, and today provides a full range of Investor Services products to UCITS and non-UCITS clients including global custody, fund accounting, transfer agency, corporate secretarial, securities lending and depositary bank services.

Dr. AU King Lun, Chief Executive Officer of BOCHK AM, said, “The Fund launch is a major milestone for BOCHK AM. Our strategic collaboration with Citi highlights the growing importance of RMB bonds as a new asset class for investors globally.”

“Citi is delighted to work with BOCHK AM to facilitate global investors in accessing a world-class solution to gain exposure to the RMB fixed income marketplace.

BOCHK AM’s insights, delivered via the UCITS format with associated benefits and safeguards, represents a timely and exciting investment proposal for a wide range of global investors,” said Mr. Eric Personne, EMEA Head of Citi’s Multi-Asset Group.