HFT to launch RMB money market fund

10 April 2014   Category: News, Asia, China, Hong Kong   By Asia Asset Management

HFT Investment Management in Hong Kong (HFT) is bridging a major gap in RMB investments, offering RMB investors and deposit holders a money market fund and thus broadening RMB investment opportunities beyond the usual equity and fixed income products.

HFT aims to launch the RMB money market fund – the first of its kind – later in April.

For RMB Qualified Foreign Institutional Investors (RQFIIs), this money market fund represents a relatively low risk investment avenue, allowing them to benefit from the attractive yields of money market instruments in China. They can gain exposure to steady yields that are relatively high for money market returns from an international perspective.

The HFT (HK) China RMB money market fund is the latest development in RQFII funds. These funds, which first came to the market in 2012, were initially limited to fixed income. Exchange traded funds came into the picture next. Now RQFII funds have been opened up to more asset classes.

It is well known that the yields on short-term debt instruments and RMB-denominated money market instruments in China are currently well above the levels of comparable RMB investments outside China. HFT is now using RQFII access to the onshore markets to make these higher yields available to investors outside China.

Jelle Vervoorn, CEO of HFT, said: “The target investors for this fund include institutional investors as well as private investors holding RMB. It taps into an obvious need of these groups to enhance the returns on their RMB investments without them having to take the risk of equity investments or traditional fixed income funds.”

The new fund will be available in share classes in other currencies, so even investors who do not hold RMB themselves can enjoy the onshore yields, with the potential of currency gains if the RMB exchange rate resumes its longer-term appreciation course.