Following the launch in March of Pictet-Chinese Local Currency Debt, one of the first Ucits-compliant onshore RMB bond funds, Pictet Asset Management has been granted access to the Chinese Interbank bond market, the main onshore market for bonds.
With investments no longer limited to bonds traded on the Shanghai and Shenzhen stock exchanges, capacity in the Pictet-Chinese Local Currency Debt fund has increased to approximately $100m (€88m).
This additional investment capacity allows Pictet AM to reopen Pictet-Chinese Local Currency Debt fund for new subscriptions.
The Pictet-Chinese Local Currency Debt fund, a Luxembourg domiciled Ucits compliant fund that is a compartment of the Pictet Luxembourg Sicav, is currently registered in the following countries: Austria, Belgium, Cyprus, Germany, Spain, Finland, France, UK, Greece, Liechtenstein, Luxemburg, The Netherlands, Portugal and Sweden.
Pictet AM was among the first European asset managers to be granted a RMB Qualified Foreign Institutional Investor (RQFII) licence by the China Securities Regulatory Commission (CSRC) in 2014. The RQFII program is a new way for foreign investors to invest directly in China.
The programme is regulated and controlled by the CSRC granting the RQFII status, the State Administration of Foreign Exchange (SAFE) granting an investment quota for approved investors and the People’s Bank of China that gives access to the Chinese Interbank Bond Market.
“We are very pleased to have obtained access to the Interbank market as this means we can fully capitalise on the potential of the fast-growing market Chinese bond market.
“It is already the world’s third largest and offers investors attractive yields and the potential for long-term currency appreciation,” says Cary Yeung, who manages the Pictet-Chinese Local Currency Debt fund with Jennifer Chang, a senior credit analyst and Echo Chen, a specialist trader in Chinese debt, all based in Hong Kong.