Schroders has launched a Chinese renminbi (RMB) - denominated bond fund which will give offshore investors access to China's growing fixed income market.
The fund, Schroder ISF RMB Fixed Income, will be lead managed by Schroders head of Asian fixed income Rajeev De Mello and Asian fixed income manager Angus Hui, and will be benchmarked against the HSBC Offshore RMB Investment Grade Bond Total Return index.
The managers will be backed by the Asian fixed income team which is made up of around 30 credit analysts located across five continents.
The fund follows on from the launch of a Hong Kong based offshore RMB bond fund in 2010 on the firm's Luxembourg platform and it will invest in Chinese government bonds, as well as in Chinese and foreign corporate bonds issued in renminbi.
De Mello (pictured) said that in the current low interest rate environment offshore RMB bonds were offering a yield of 4% for the overall index, and 3.6% for the investment grade non-government sector.
He added: 'The investment grade quality of credits combined with a robust yield, not only offers investors a practical way of protecting their portfolios from global uncertainty but also gives them long-term potential in an exciting and growing market.'
Schroders global head of fixed income Karl Dasher said: 'We are keen to extend this product offering to a broader range of clients via our Luxembourg platform. This reflects Schroders’ commitment to the developing asset class, which has enjoyed an exceptional growth trajectory over recent years and our belief that the RMB’s importance in a global context is increasing rapidly, providing a solid long-term fundamental story for the currency.'
The fund launched on 7 November.