Barclays Capital Fund Solutions (BCFS), the asset management business of Barclays Capital, yesterday announced the launch of a Ucits III-compliant retail renminbi bond fund in Singapore, which will invest entirely in offshore – Hong Kong-issued or CNH – RMB bonds.
RMB bond fund launches have come thick and fast in Hong Kong in recent months, from asset managers including China Construction Bank International, CSOP and Haitong. But the only vehicle other than BCFS's offered in Singapore – said to be the first of its kind in the Lion City – is UOB Asset Management’s United Renminbi Bond Fund. The product, whose IPO period runs from March 16 to April 29, has a minimum investment level of S$5,000 or US$5,000.
However, the BCFS fund has the advantage of being Ucits-compliant, meaning it will be easy to sell in markets outside Singapore, such as Europe.
“It made more sense to provide RMB access to clients in Singapore, because there have been far fewer launches here than in Hong Kong, where it is becoming harder to differentiate between them,” says Peter Hu, Singapore-based head of investor solutions for Asia ex-Japan.
It was no more difficult to launch an RMB fund in Singapore than it would have been in Hong Kong, he adds, nor did the Ucits wrapper raise any issues.
The initial offer period for the BCFS fund is April 4 to May 3, with a minimum investment of Rmb10,000 or 1,000 US, Singapore or Australian dollars. It will be distributed in Singapore through HSBC and Standard Chartered.
Paul Hopkins, Asia head of Barclays Capital Fund Solutions, declined to comment on how much BCFS expects or hopes to raise for the fund. He did say the firm needs to restrict access to the fund to key distributors and markets in order to more effectively balance investor inflows with availability of bonds in the market.
One of the main challenges for RMB bond funds at present is finding a sufficient amount of bonds to buy (see AsianInvestor magazine’s cover story in the March 2011 issue).
As for other products, BCFS will wait to see how the Singapore tranche turns out before launching funds or private placement vehicles in other markets, says Hu.
BCFS manages £4 billion globally in institutional and retail assets, spread across asset classes including equity, fixed income and commodities.