Hot on the heels of the gradual internalization of the Chinese currency, a Nordic-based firm launched a renminbi-denominated fund with eyes on Asia’s high yielding debts.
Nordea Asset Management has unveiled a fund that will invest in high yielding Asian bonds denominated in U.S. dollars, according to Hedgeweek.
The investment though will be hedged in the Chinese currency, as well as in high yielding bonds denominated in the renminbi.
Higher yielding Asian bonds and easier monetary policy in China are the factors that motivated the Nordic region’s biggest money manager to launch the fund.
Hedgeweek wrote:
“In a world of compressed yields, these markets are offering attractive yield levels of 9% to 13% – while accommodative monetary policy in China will continue to support the asset class.”
Around 50% to 75% of the fund will be invested in Greater China, while another 25% to 50% will go to other parts of Asia. The fund is eyeing the real estate and banking and finance sectors in particular, the report said.
China has taken an aggressive approach to boost the global use of the renminbi including putting up more yuan clearing centers abroad and liberalizing its capital market. The government also wants the renminbi to be part of the IMF’s currency reserve now composed of the dollar, yen, euro and the sterling.
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