Deutsche Asset & Wealth Management Investment has been confirmed as the first asset manager in Germany to be granted a renminbi qualified foreign institutional investor (RQFII) license. With the license in place, Deutsche AWM can now apply for quota to invest in China mainland securities.

The award of the license follows an agreement reached last year between Germany and China to establish a quota of 80 billion renmibi (11.2 billion euro) that German-based financial institutions can use to invest in China's domestic capital markets. The Bundesbank described the agreement at the time as a milestone on the road to creating a renminbi trading centre in Frankfurt.

"Deutsche AWM has been at the forefront of providing international investors with access to China's domestic capital markets, so we're pleased to be the first asset manager in Germany to be awarded an RQFII licence. With China's enormous growth potential this is a very important market for both our active and passive investment management clients," said James Dilworth, CEO of Deutsche AWM.

Deutsche AWM has several fund offerings that provide exposure to China. Furthermore, Deutsche AWM is one of the largest China A-Shares ETF providers in Europe and the US, with assets under management of over 2 billion euro (as at January 31 2015). This includes the first RQFII ETFs approved in Europe and the US linked to the CSI300 Index, which consists of the 300 stocks with the largest market capitaliazation and liquidity from the universe of A-shares listed in China.

Reinhard Bellet, Deutsche AWM's head of passive asset management, commented: "With programmes such as QFII [Qualified Foreign Institutional Investor], RQFII, and also now the recently introduced Hong Kong-Shanghai Stock Connect initiative, China is successfully internationalizing its financial markets. Demand for our China ETFs has been substantial, so we welcome any expansion of the quota programme."

On the active asset management side, the Deutsche Invest I China Bonds mutual fund was launched in August 2011. The fund has attracted US$2.2 billion in assets (as at February 2 2015), underpinned by significant client interest in the asset class. The fund offers investors access to China's renminbi-denominated bond market, focusing on bonds with 'good' to 'very good' credit ratings.

"We have been engaged as an investor in China ever since the market began to open up internationally, which is why Deutsche AWM is one of the world's leading experts on providing investment solutions for Chinese exposure. Today, we focus on renminbi-denominated or renminbi hedged offshore bond investments. Going forward, and once we have received quota, we want to enable an extended opportunity set, including onshore and offshore bonds. Finally, this is not only about accessing this market - it is about creating added value and potential alpha for our clients," added Dilworth.