Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a611543

Allianz re-opens offshore renminbi fund after liquidity measures

by Emma Dunkley on Aug 15, 2012 at 10:55

Allianz re-opens offshore renminbi fund after liquidity measures

Allianz Global Investors has re-opened its Luxembourg-domiciled Renminbi Fixed Income fund , having soft-closed it at the end of last year to preserve liquidity.

The move to soft-close the Ucits fund came after assets rocketed to €450 million only two months after it launched.

Although the fund aims to invest in high quality issuers as the market matures, it will initially hold the majority of assets in renminbi deposits through inception, with initial yields of 1%-1.5%, to maintain Ucits compliance.

The fund, managed by Helen Lam, aims to deliver a total return, including currency appreciation, of around 5% over the long-term.

Lam will invest primarily in high grade CNH bonds – CNH denoting the currency being traded offshore, mainly in Hong Kong.

Lam said: ‘We expect that high grade quality CNH bonds should be able to offer a stable return of 3 – 4% through the attractive yield component.

‘We also expect to enhance the portfolio’s total return through duration positioning to capture the policy-driven interest rate movements in mainland China.’

She added: ‘Though the recent fundamental and cyclical factors in China seem to suggest a softening RMB appreciation outlook, we believe that the pace of RMB appreciation will remain stable going forward.

‘This should be supported by China’s strong commitment to the RMB Internationalisation process through the promotion of cross-border trade and investment flows. Recent data suggests that approximate one-tenth of China’s total trade is settled in RMB, up from only 2% two years ago.’

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Investing for income in a changing environment


With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

More about this:

Look up the funds

Look up the fund managers

  • Helen Lam
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet