The market is expecting a spate of offshore yuan fund products around Lunar New Year as 20 securities firms approved by the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme start to use their 18.9 billion yuan (HK$23 billion) quota.
Guotai Junan Securities, one of the second batch of 10 securities firms, yesterday said it would use its 900 million yuan RQFII quota to launch an offshore yuan fund shortly before or after the holiday.
Yuan Junping, one of the directors of Guotai Junan Securities, said over 90 per cent of the fund would be invested in bonds and other fixed-income products. The fund would mainly invest in second-grade bonds, he said, and it might increase its exposure to A-shares when market uncertainties receded.
The fund was expected to yield 4.5 per cent to 6 per cent a year, and the minimum investment would be 10,000 yuan. Investors would also have to pay a 1.2 per cent management fee.
Yuan said such products would be sought after due to expectations the yuan would continue to appreciate.
HFT Investment Management (HK), a joint venture between Haitong Securities and BNP Paribas, said it would launch an offshore yuan fund product shortly after Lunar New Year using its 1.1 billion yuan quota. The fund would mainly target retail investors.