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Komfie Manalo, Opalesque Asia:

Industrial and Commercial Bank of China’s European subsidy ICBC (Europe) S.A., has become the first EU registered Chinese bank to launch an onshore RMB fixed income UCITS fund, after receiving approval in principle from CSSF, the Luxembourg regulator. ICBC is the world’s largest bank by assets.

In a statement, the company said that ICBC (Europe)’s UCITS SICAV – China Opportunity RQFII Bond Fund would have 100% exposure to China’s domestic bond market and includes Chinese government bonds, policy bank bonds and corporate bonds.

The fund will also leverage Hong Kong’s allocation of RMB270bn from China’s Renminbi Qualified Foreign Institutional Investor (RQFII) program. RBS (Luxembourg) S.A. will provide independent management company and governance services to the UCITS Fund.

Madam Hu Yabing, deputy head of Asset Management Department at ICBC, said, "The purpose of this launch is two-fold. Firstly, this RQFII UCITS fund serves as a gateway for European investors to access China’s booming domestic fixed-income market, which offers an attractive risk-adjusted return and which has been previously difficult to access by overseas investors. Secondly, this launch also highlights the trend towards RMB internationalization and strengthens Luxembourg’s leading position as a European RMB centre for asset managers."

China’s domestic bond market is worth RMB34tln (EUR4.3t......................

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