HSBC Further Solidifies RMB Offering With European Fund

Vanessa Doctor

30 October 2011

HSBC Global Asset Management has launched a new fixed income fund that allows UK and European investors access to Renminbi investments.

The HSBC GIF RMB Fixed Income fund is part of the HSBC Global's Luxembourg-based Global Investment Funds SICAV and will be registered for sale across Europe. It is managed by the Hong Kong-based Asian fixed income team, led by Cecilia Chan, who brings 17 years of Asian fixed income experience to the role. The team manages a total of $24 billion in Asian fixed income as of 30 June 2011.

The fund's focus will be on offshore RMB-denominated instruments, including bonds and deposits. The RMB market is made up of shorter duration instruments so it is likely that the average duration of the fund will fall into the one to three-year range.

"Chinese authorities have allowed a managed appreciation of the currency to cool the economy and to ease international relations with trading partners who objected to the advantageous terms of trade that a weak Renminbi has meant for China," commented Chan in a statement.

"This process still has further to go and the Renminbi has the potential to be one of the world's major reserve currencies in the future," added Chan.

HSBC Global Asset Management is just one of the international financial services firms that actively participate in the fast-growing RMB market, which include Van Eck Global, Julius Baer, UBS and Credit Suisse. Just this month, HSBC decided to expand its RMB product offering beyond Shanghai to include all other cities in China. The company records $139 billion under management in this asset class as of 30 June 2011.