China Universal to launch CUAM RMB Bondplus Fund
The China Universal International Series - CUAM RMB Bondplus Fund, the first RQFII product of Hong Kong-based China Universal Asset Management (Hong Kong) has received approval from the Hong Kong Securities and Futures Commission to become one of the first batches of RQFII products to be launched in the city. The fund will soon be available for subscription through major banks in Hong Kong.
Andy Lin Li Jun, chief executive officer of China Universal, said the launch of RQFII in Hong Kong is a significant development for both investors and China. RQFII enables Hong Kong investors to have access to investment products with direct exposure to the mainland market to capitalize on the investment opportunities there. It also establishes a mechanism for offshore renminbi to be invested back in the mainland capital markets, and contributes to the internationalization of the renminbi. RQFII will become a new long term source of capital that will be instrumental for the healthy development of the mainland capital markets, he added.
To capitalize on investment opportunities and optimize asset allocation in the fixed income and equity markets, China Universal (HK) has appointed two fund managers who will each be responsible for the fixed income and equity investments of its inaugural RQFII fund, respectively. In addition, China Universal’s investment research and trading teams also have broad experience in China as well as to overseas capital markets, and is ideally positioned to support the operation of the RQFII fund.
To ensure the smooth sales and operation of its first RQFII fund, China Universal (HK) has conducted extensive discussions with its business partners and completed system comparison tests to build a comprehensive framework for the fund’s operational management. This enables the increased efficiency of back-office processes such as verification of the net value of the fund’s assets, back-office customer services and monitoring of foreign exchange quotas.
China Universal’s RQFII team is confident about the potential of CUAM RMB Bondplus Fund. Lin said he holds a positive view on the investment opportunities in the mainland bond market in 2012. On the one hand, the prevailing bond yields are relatively high. On the other hand, as inflation starts to moderate, reserve requirement ratios for banks as well as interest rates may be lowered. In addition, as a key element in the development of the capital market, mainland authorities have placed great emphasis on the enhancement of the bond market, including improvements in market infrastructure and environment, which will further enhance the variety of bond products. All these factors will pave the way for the smooth operation of the fund going forward.
‘We have confidence in the long term prospects of China’s economy and capital market. Our first RQFII product is carefully designed with the aim of letting Hong Kong investors benefit from the investment opportunities afforded by the rapid growth of China’s capital market and economy,” Lin commented. “Furthermore, we hope to expand our foreign business in order to seize further opportunities created by the internationalization of the renminbi through the launch of more RQFII products in Hong Kong.”