CCB Unit Said to Offer Europe’s First RQFII Money Market ETFBloomberg News
CCB International Asset Management Ltd. will offer Europe’s first exchange-traded fund that invests in China’s money market, said two people familiar with the matter.
The ETF will be listed in London and will be tradeable in yuan, euro, or pounds, the people, who asked not to be identified as the plan hasn’t been announced publicly, said Monday. It will give access to China’s onshore market via renminbi qualified foreign institutional investors, they said. CCB International, a unit of China Construction Bank Corp., will release an official statement in due course, the company said in an e-mail Monday.
Loose monetary policy in Europe has pushed yields on German and Finnish sovereign bonds into negative territory, prompting global fund managers to seek higher returns elsewhere. The one-month Shanghai interbank offered rate has averaged 5.03 percent this year, compared with 4.58 percent in 2014 and the 0.17 percent 2015 average of the one-month London interbank offered rate for dollars.
“China is certainly an attractive destination for money managers around the world, given the high yields,” said Wang Ming, chief operations officer at Shanghai Yaozhi Asset Management LLP, which oversees 2 billion yuan ($322 million) of fixed-income holdings. “A global environment of low interest rates will probably persist this year, so yuan assets will continue to be attractive.”
Yu’EBao, China’s largest money-market fund with 579 billion yuan of assets under management, offers a return of about 4.5 percent, according to data released on the website of Tianhong Asset Management Co., the investment vehicle’s manager. That compares with the one-year local benchmark deposit rate of 2.5 percent.
There are around 40 ETFs registered in the U.S. tracking China’s shares and debt.
— With assistance by Wenwen Zhang, Heng Xie, and Helen Sun