HONG KONG, Jan 7 (Reuters) - Asset manager E Fund (Hong Kong) has secured a further 800 million yuan ($128 million) quota to invest in the mainland’s capital market via an offshore fixed-income fund denominated in yuan, amid global investors’ increased interest in buying yuan assets.
It brings the total quota for E Fund RMB Fixed Income Fund under the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme to 1.9 billion yuan ($305 million).
The fund seeks to achieve capital growth in RMB terms through investment in a portfolio of bonds with a credit rating higher than AA.
China introduced the RQFII scheme at the end of 2011 with an initial quota of 20 billion yuan and raised that to 70 billion yuan last year, allowing foreign investors to use offshore yuan to buy mainland securities.
Nine fund houses and 12 securities firms shared the first 20 billion yuan quota, which can invest up to 20 percent of the money in China’s stock market and have at least 80 percent in the fixed-income market.
E Fund RMB Fixed Income Fund has topped the RQFII fixed income funds with an accumulated total return of more than 5.45 percent for the institutional investor class from the inception date of the fund on February 282012, to the end of the year, the company said in a statement.
E Fund now manages a fixed income fund and an exchange-traded fund (ETF) under the RQFII programme. The quota for its A-share ETF denominated in yuan was doubled to 10 billion yuan last month to meet strong demand. ($1 = 6.2303 Chinese yuan) (Reporting by Michelle Chen; Editing by Eric Meijer)