Six weeks after China revalued its currency and repegged it to a basket, Deutsche Bank has launched a guaranteed fund for Hong Kong retail investors who believe the yuan will continue to appreciate and trigger gains in other Asian currencies in the next few years. Describing it as the first guaranteed fund linked to the performance of Asian currencies to be offered to local investors, Ken Sue, head of the bank's Investment Products Group in Asia, said the fund provided 'easy access to an asset class that is not easily accessible at the retail level'. It would also offer diversification to the average retail investment portfolio that typically comprised mainly equities and bonds. The launch comes at a time when the bank sees a strengthening case for Asian currency appreciation in the medium term. 'If you are looking at FX globally and a fundamental case for revaluation or appreciation over time, it is very difficult to find anywhere that is as attractive as Asia,' said James Malcolm, the bank's senior Asian currency strategist, noting the strong economic growth and demand for exports from the region. Also, Asian currencies were the major counterpart if the US dollar were to decline further over time to address the global imbalances and the US balance of payments problems, he said. 'China holds most of the keys to when and how this will happen, but we have seen the initial step and we think something like a 5 per cent appreciation per year in the yuan is likely to happen,' Mr Malcolm said. Since the 2.1 per cent revaluation to 8.11 against the US dollar on July 21, the yuan has strengthened about 0.19 per cent to yesterday's 8.0949, which marked the strongest close since the peg adjustment. The yuan is one of the four currencies that will determine the returns for Deutsche's new fund, with the others being the Malaysian ringgit, the South Korean won and the Singapore dollar. Investors are guaranteed all their capital back if the units are held until maturity and a 2 per cent payout after six months. Further returns will be determined by the weighted performance of the four currencies against the US dollar during the life of the fund, with the yuan accounting for 40 per cent and the others 20 per cent each. Subscriptions are open until September 30.