China Asset Management, the Beijing-based wealth manager that was granted the highest RMB qualified foreign institutional investor quota by Chinese authorities, is launching its first fund.
ChinaAMC, one of the ten included in the first batch of qualified firms, was given a ceiling of RMB1.2 billion ($190 million) under the China Securities Regulatory Commission's RQFII programme launched in December 2011. The new fund, ChinaAMC Select Renminbi Bond Fund, will be introduced by its Hong Kong arm and will allow offshore investors direct access to the country's domestic fixed income and equity markets.
"Currently, the offshore renminbi holders have very limited investment channels. In general, one-year renminbi deposit rates are below one percent. The domestic RMB bond market is much larger and more diverse so that sector allocation and security selection has more room to play," said Iris Chen, chief executive of ChinaAMC (Hong Kong).
The RQFII programme allows qualified investors the chance to invest RMB funds raised in Hong Kong in the Mainland securities markets under a predetermined quota. The total investment quota set for the first batch of companies is around RMB20 billion. ChinaAMC got the largest share, while the other firms received either RMB1.1 billion or RMB900 million.