CSOP rolls out Mainland’s first RQFII treasury bond ETF

19 February 2014   Category: News, Asia, Global, Hong Kong   By Hui Ching-hoo

CSOP Asset Management began accepting subscriptions from the primary market for its CSOP China 5-year Treasury Bond ETF on February 18.

China’s first RQFII treasury bond ETF has already attracted more than 750 million RMB (US$123.66 million) worth of subscription from institutional investors. The ETF will be listed on the main board of the Hong Kong Stock Exchange on February 19 – it has an initial RQFII quota of 2 billion RMB.

CSOP Asset Management’s CEO, Chen Ding, previously told Asia Asset Management that the rationale behind CSOP launching a treasury bond ETF was mainly to accommodate foreign investors’ pent-up demand for CNY fixed income products. “Many overseas institutional investors favour Mainland onshore credits because of RMB appreciation against the US dollar. In addition, the yield from them is relatively attractive compared to the treasuries in many developed economies.”

The CSOP China 5-year Treasury Bond ETF has been designed to track the ChinaBond 5-year Treasury Bond Index, which comprises a selection of large-sized, highly liquid and well-known treasury bonds with maturity terms of four to seven years.

Additionally, the ETF implements a quarterly dividend distribution mechanism and supports trading on both RMB and Hong Kong-dollar counters, which provides investors with flexibility and convenience and enables them with good access to relatively high yields and the stability of PRC onshore treasury bonds.