You are here: cherry > Press releases for June 2011 > Allianz Global Investors to launch Renminbi Fixed Income Fund

02 June 2011

The Fund will aim to provide investment returns above RMB deposit rates over the long-term It will be UCITS compliant and invest in high quality issuers as the market develops Allianz Global Investors announces the launch in mid-June* of the Allianz RCM Renminbi Fixed Income Fund in response to European client demand1. The Allianz RCM Renminbi Fixed Income Fund seeks long term capital growth in renminbi terms. To achieve the investment objective, the strategy will invest primarily in RMB deposits and a diversified portfolio of investment instruments including: RMB government bonds, RMB corporate bonds, RMB quasi-government bonds, RMB supranational bonds, RMB deposits, RMB certificates of deposit, and may invest in convertible bonds to enhance the yield. The fund will seek a total return, inclusive of currency appreciation, in excess of 5% p.a. over the longer–term. The fund will be Luxembourg domiciled and UCITS compliant. It will aim to invest in the high quality issuers as the market matures. The majority of the assets will be held in RMB deposits through inception, with initial yields of approximately 1.0 – 1.5%, to maintain UCITS compliance. Raymond Chan, CIO Asia Pacific at RCM, adds: “While at present the use of the renminbi outside of China is limited, demand is very strong and we have seen the volume of renminbi deposits held offshore in Hong Kong rise by over 500% in the past twelve months2. The renminbi bond issues by Caterpillar and McDonald’s last year, were both oversubscribed and the supply of renminbi bonds in Hong Kong is much less than demand, despite the expansion in the renminbi bond universe.” The new Fund will be managed by RCM, a global asset manager providing active investment strategies and a company of Allianz Global Investors. RCM has significant expertise in Asia Pacific, with 26 years of experience in the region and 38 investment professionals on the ground managing over 14 billion USD across regional strategies and single country funds. Nick Smith, a managing director of Allianz Global Investors Europe, comments: “We are very excited to be able to offer European investors such a compelling investment opportunity. We believe that the renminbi is substantially undervalued, but the options at present for investors to gain exposure to this growth story are extremely limited. Hong Kong residents can buy up to HK$20,000 (US$2,600) a day of renminbi, but for now, global investors can only invest via a fund. We anticipate considerable interest from investors across Europe in this fund.” - Ends -

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