UBS Asset Management launches first Luxembourg UCITS fund denominated in onshore Renminbi (CNY). (Photo: DR)

UBS Asset Management launches first Luxembourg UCITS fund denominated in onshore Renminbi (CNY). (Photo: DR)

  • The fund allows global investors direct access to the China Interbank Bond market (CIBM)

  • Chinese bonds offer very attractive nominal and real yields, relative to developed market yields

  • UBS AM is a leading international asset manager in China for both onshore and offshore investors1 

UBS Asset Management (‘UBS AM’) announces the launch of the first Luxembourg-domiciled UCITS fund which applies a base currency in the onshore Renminbi (CNY): the UBS (Lux) Bond SICAV – China Fixed Income (RMB).

UBS Asset Management is the first on market with a product through which global investors can have direct access to the China Interbank Bond Market (CIBM) via a Luxembourg-domiciled UCITS fund which uses CNY as the base currency . China’s bond market is the third largest in the world and the Renminbi has a proven track record of lower volatility than other major currencies .

The fund will mainly invest in onshore CNY-denominated fixed income instruments, with Net Asset Value (NAV) calculated in onshore Renminbi (CNY) instead of offshore Renminbi (CNH), avoiding NAV volatility caused by discrepancies in CNY/CNH rates.

Ashley Perrott, Head of Pan Asia Fixed Income and lead Portfolio Manager on the fund, said: “This fund opens up new opportunities for global investors and gives direct access to the world’s 3rd largest bond market and the numerous opportunities that exist within it. Chinese bonds offer very attractive nominal and real yields relative to developed market yields, making the China bond market a compelling investment opportunity. This market will continue to attract investor attention as more global indices start to include China in their benchmarks.”

Hayden Briscoe, Head of Asia Pacific Fixed Income, said: “We are excited to be launching this fund which builds on UBS AM’s track record of delivering innovative products that give investors exclusive opportunities to invest in China.”

UBS AM is a leading international asset manager in China and this launch comes hard on the heels of UBS AM launching the first onshore equity fund for local Chinese investors in November 2017, as well as becoming the first Qualified Domestic Limited Partner (QDLP) license-holder to receive a Private Fund Management (PFM) license in July 2017. 

1: Source: Z-Ben Rankings, 2017 report based on 31 December 2016 data. Rankings are based on weighted scores from Onshore, Inbound and Outbound business levels. #2 foreign asset manager and #1 non-US asset manager.