UBS Asset Management has launched 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, according to UBS AM.

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, says: “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 investors' attention as more global indices start to include China in their benchmarks.”

Photo: Arnapoli / Wikimedia