The Chinese Onshore Bond fund went down twofold over the past month, according to its asset manager on Tuesday. Besides the market's largest bond market, growing interest in Hong Kong's second largest currency rate is up fourfold over the past month.
AUM, named after the Bloomberg Economic Growth Fund (BSI) rose to about 5 billion yuan ($784.61 million) after its asset under management increased to 784.61 million ($675 million) in a statement.
In this statement, yuan-denominated bond ETF helps enrich RMB (yuan) products in Hong Kong further, and give international investors an opportunity for RMB asset allocation," said Gao Ming, a chairman and executive director of ICBC (Asia), who's asset management unit is a financial adviser to the ETF.
Other official from the company said net flows last month alone exceeded 4.5 billion yuan.
Since beginning February 2014, the ETF was reported to have achieved the same returns as it had in February 2014. The company said that it had shown a 30-50% return.
In the new Chinese bond ETF, the AUM explosion occurred as FTSE Russell launched a global market-report last month to include Chinese government bonds to its flagship global index.
Even though China sold offshore sovereign bonds recently, it was a sign of China's future economy and the economic slowdown, and the country's real estate debt has irritated the Chinese dollar bond market.
The spread between China's 10-year treasury bonds and their U.S. counterparts has narrowed over the past year, but remains attractive to yield-seeking global investors, around 1,3 percentage points.
The China onshore bonds yield a higher yield and a relatively lower exchange rate volatility than other major economies, says CSOP Asset Management in the statement.
The low correlation between domestic and international bonds would provide more investment opportunities and diversification.
The Foreign Investment Fund held the Chinese Government bonds worth 2.3 trillion yuan in the end of October, the highest level on record and the highest level by 1.06% from a month earlier.
1 USD = 6 326 yuan
The trusts principles.