China Asset Management (Hong Kong) (ChinaAMC (HK))has launched a new exchange traded fund (ETF) tracking the performance of China treasury and policy bank bonds.
The Hong Kong-listed ETF – ChinaAMC Bloomberg Barclays China Treasury + Policy Bank Bond Index ETF – aims to provide investment results that closely correspond to the performance of the Bloomberg Barclays China Treasury + Policy Bank Index.
The index is a sub-index of the flagship Bloomberg Barclays China Aggregate Index and reflects the performance of fixed rate RMB-denominated treasury bonds and policy bank bonds with a minimum of one year to maturity listed on the China inter-bank bond market.
The company’s spokesperson told Citywire Asia that the new ETF is targeted at foreign institutions who want an overall exposure to China government debt and renminbi (RMB), as well as asset managers who have active portfolio tracking the Bloomberg Barclays Global Aggregate Index and use it as a benchmark solution.
It is also targeted at investors who seek access to the China government bond yield via an easy and cost effective way, the spokesperson said, adding that the ETF targets about 4% yield.
Frank Xiaoling Zhang, the company’s CEO, said he observes an increased appetite for Chinese bonds from global investors following Bloomberg's announcement in March to add Chinese RMB-denominated government and policy bank securities into the Bloomberg Barclays Global Aggregate Index in March.
CIting data from China Central Depository and Clearing, the company said the volume of outstanding China treasury bonds was RMB12.4 trillion ($1.94 trillion) at the end-April. Meanwhile, foreign ownership of China treasury bonds reached RMB780.8 billion ($121.9 billion).
ChinaAMC (HK) is a wholly-owned subsidiary of China Asset Management Co.