The yuan is not like other currencies, which gyrate in ways only the most sophisticated quant traders can understand. Instead, it has charted a steady advance and people from all walks of life are scrambling to stock up on it. The ceaseless international chorus telling us how 'undervalued' the yuan is only whets investors' appetite for the currency.
The currency's appreciation has given rise to a suite of related investment products that hit the shelves in Hong Kong a few years ago and have since picked up in both quantity and breadth.
'But don't be blinded by the hype of the renminbi increase,' warned Thomas Tang, private client services manager at wealth manager ipac. 'A lot of people are predicting renminbi is going to go up and they just start jumping in.'
Unless you only intend to accumulate the currency, the value of the yuan is actually just one component of this investment. Yuan-linked products like bonds and stocks all carry distinct risks and rewards. And Tang says investors who want to gain access to the currency should mix and match according to their investment needs and risk profile.
'We always suggest our clients to diversify their portfolio and not put everything into one area, even [with] yuan,' Tang said. 'And when people are looking into yuan products, just be careful with their terms and conditions and whether it actually suits them.'
Here are five possible ways you can play the yuan's rise:
Deposits
