Allianz GI out to diversify RMB fund range in HK

The firm launches five RMB-hedged retail funds with exposure to asset classes across Asia, Europe and the US, saying the universe is too limited for the world's largest offshore RMB hub.
Allianz GI out to diversify RMB fund range in HK

Allianz Global Investors has sought to broaden the universe of RMB-denominated retail funds in Hong Kong by launching five products with underlying exposure to a range of asset classes and geographies.

The Allianz Selection Funds Series comprises RMB hedged share class products across the risk-return spectrum. The funds are invested in all asset classes across Asia, Europe and the US, including money markets, corporate bonds, high-yield and convertible bonds and equities.

“Hong Kong is the world’s largest offshore RMB centre, with over Rmb1 trillion ($163 billion) in deposits, yet investment options to date have been limited to fixed deposits and RMB qualified foreign institutional investors funds (RQFII),” said Jenny Yu, Allianz GI’s head of distribution for Greater China.

The new products comprise US income and high-yield strategies, a total return Asian equity fund, an income and growth product and a European dividend strategy. All the funds distribute monthly dividends. Their investment objectives are long-term capital appreciation and income.

The US income product invests primarily in corporate bonds; the US high yield strategy in corporate debt; the selection income and growth fund is exposed primarily to US assets, including equities and convertible bonds; the total return Asian equity product is focused on high-growth Asian stock markets; and the European equity dividend product invests in European equity markets.

Yu said she expects market volatility to continue on the back of tapering in the US, improved economic performance, more stimulus measures in some countries and rising interest rates. She forecast that rates may start to rise as early as mid-2015 in the US.

A raft of other companies are setting up or building out in Hong Kong with an eye on the Rmb100 trillion-plus of deposits in China that could be accessed when cross-border mutual fund recognition with the mainland is implemented.

They include Old Mutual Global Investors, BlackRock, Franklin Templeton and Vanguard.

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