Schroders has launched the ISF RMB Fixed Income Fund, a new strategy which allows offshore investors to access China’s fixed income market in the Chinese currency.

The fund invests in a diversified portfolio of Chinese government bonds and Chinese and foreign companies bonds issued in renminbi. It is actively managed by Schroders’ Asian fixed income team led by Rajeev De Mello, head of Asian fixed income and Angus Hui Asian fixed income fund manager.

The launch comes at a time - as reported here yesterday - that Western and local Asia private banks and other firms acting for wealthy clients have been notable buyers of RMB-denominated new bonds, attracted by valuations. (To see the comments from Nikko Asset Management on the trend, click here.)

“Offshore RMB bonds provide investors with multiple sources of return potential in addition to the currency appreciation. 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,” De Mello said in a statement.