Harvest Global Investments (HGI) has launched the Harvest China Bonds fund which invests in China’s Bond Connect.

Launched in July 2017, Bond Connect allows institutional investors in Hong Kong and foreign investors including high-net-worth individuals, to tap into China’s $9 trillion government and corporate debt markets.

The new fund will be managed by Citywire AA-rated Thomas Kwan, chief investment officer of HGI. HSBC Securities Services (HSS) Luxembourg is the custodian bank and fund administrator.

The fund will be exposed to a portfolio of bonds issued or guaranteed by Chinese central and local governments, top tier financial institutions and corporations domiciled in China, including Hong Kong.

Kwan said it will focus on investment grade credit with a duration of two to four years and target up to 70% exposure to onshore Chinese bonds.

‘We have seen the China Interbank Bond Market developed rapidly and China is determined to open up the capital markets for foreign investors and asset managers,' said Nicholas Maton, head of securities services, HSBC in Luxembourg.

‘Bond Connect is one of the key milestones among many China access programs including QFII, RQFII and Stock Connect.'

The Harvest China Bonds Fund joins a portfolio of UCITS funds that have launched since 2014 and been managed by HGI. This includes the Harvest China Evolution Equity fund, Harvest Asia Stock fund, and Harvest China A Share Equity fund.

According to the Hong Kong-headquartered firm, UCITS funds are increasingly popular with Asian investors because the UCITS label provides assurance that certain regulatory and investor protection requirements have been met.