Nikko AM to launch Singapore’s first Chinese onshore bond fund
Singapore’s first Chinese onshore bond fund is being launched by Nikko Asset Management Asia in partnership with the Bank of China and DBS Bank.
The launch comes on the back of Nikko AM’s RMB1 billion quota award for the fund as a Renminbi Qualified Foreign Institutional Investor (RQFII).
The fund is expected to launch in Singapore in mid-July.
“We are elated to be pioneering the Chinese onshore bond fund,” says Eleanor Seet, president of Nikko AM Asia. “The fund is strategically significant as a long-term proposition supporting Singapore’s role as a key offshore RMB centre. We take pride in being a forerunner in RMB internationalisation by providing Singapore domiciled investors with direct access to China onshore bonds, which are not readily accessible to foreign investors.
“This is the first in a suite of RQFII solutions we are planning to provide. We expect allocations into this market from both local and global investors to grow, especially with a long-term positive outlook on the currency.”
“We are pleased to partner with Nikko AM on the fund. While there is generally strong interest in bonds in Singapore, there are limited RQFII allocations available to offshore investors. Such bond funds will provide investors with the opportunity to participate in China’s growth and add diversification to their portfolio,” says V Arivazhagan, managing director & head, regional investment & treasury products, consumer banking group, DBS Bank.
The fund, subject to regulatory approval, is designed for retail investors in Singapore seeking a total return of capital growth and income over the medium to long term through exposure to RMB and listed and unlisted RMB denominated fixed income instruments.
Investors in Singapore can invest in RMB through the Bank of China and DBS Bank when the fund becomes available in mid-July.
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