HSBC Global Asset Management announced on November 5 the launch of the HSBC China Government Local Bond Index Fund, which is designed to offer investors a cost-efficient way to access China’s government bond market.
The fund will track the performance of the Bloomberg Barclays China Treasury and Policy Bank 9% Capped Bond Index. It will be domiciled in Ireland under HSBC’s ICAV platform, which facilitates access to funds globally.
The fund will be managed by HSBC Global Asset Management’s passive fixed income team, led by head of Passive Fixed Income, Sebastien Faucher. The team currently manages around US$6.9 billion of assets in different strategies.
Faucher, head of Passive Fixed Income at HSBC Global Asset Management, comments: “With global yields at historically low levels, investing in China onshore bonds can offer investors the yield premiums they are searching for. At the same time, our view is that this asset class is far less impacted by global risk sentiment, offering compelling diversification benefits.
“As China opens up its bond market to overseas investors, foreign ownership in its onshore government bonds and policy bank bonds has picked up to around 8% and 3% respectively and is expected to rise further in the coming months presenting significant opportunities,” he adds.