Baring Asset Management, the global investment management firm, has launched a new renminbi-focused fund to address the growing demand for high-yield asset products.

The Baring China Bond Fund will invest in RMB-denominated debt securities and China-linked products, targeting income, capital appreciation and currency gains. It will be led by Sean Chang, the head of Asia debt. 

The launch comes as the Chinese government is welcoming a more open capital markets environment and promoting the RMB as a major global currency. 

"While the RMB has recently been allowed to strengthen against the US dollar, the currency remains structurally undervalued with significant potential for appreciation," said Chang.

The fund will have an annual management charge of 1.25 per cent. A minimum investment of £2,500 ($4,000) is required.

Baring Asset Management has been stepping up its Asian presence over the past months. In August, the firm expanded into Korea through the takeover of SEI Asset Korea. Besides Hong Kong, Baring's offices in the region are in China, Japan, Korea and Taiwan.