BlackRock’s iShares ETF business has launched its Asia’s first offshore RMB-denominated bond ETF in Hong Kong to expand its fixed income ETF product offering.
The iShares RMB Bond Index ETF is designed to address the growing demand from investors for opportunities to tap into the rapidly developing offshore RMB (Dim Sum) bond market, while offering the benefits shared by iShares ETFs; including exchange-traded liquidity, provider stability and transparency.
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The new ETF has been authorised by the Securities and Futures Commission of Hong Kong and will be listed on the stock exchange of Hong Kong on 18 June 2013.
The iShares RMB Bond Index ETF provides a new vehicle for local and international investors seeking to access the fast-growing RMB bond market.
It replicates the market performance and delivers investment results that closely correspond to the performance of the Citi RMB Bond Capped Index.
With this launch, investors are now able to access a diversified basket of 92 RMB bonds, across 18 countries in dual currencies, i.e. RMB and Hong Kong dollars, in one trade.
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Managing director at BlackRock and head of iShares Asia Pacific, Jane Leung said: "Inflows of fixed income exchange-traded products reached a record high of $70.0 billion in 2012, whilst the size of the offshore RMB bond market increased nearly five times over the past two years to exceed RMB400 billion (US$65.19 billion)."
Director at BlackRock, head of Hong Kong Retail and iShares distribution, Julia Lee said: "With the launch of the iShares RMB Bond Index ETF, investors are able to seize the enormous opportunities in the dim sum bond market in a disciplined, diversified and cost-effective manner, which is backed by the unparalleled global fixed income investment capability of iShares."
"The new iShares RMB Bond Index ETF will start trading in board lots of 100 units costing RMB 3,500 per lot at an initial issue price of RMB 35," he added.
This ETF is a physically backed ETF which invests at least 70% in investment grade RMB bonds.
The iShares RMB Bond Index ETF invests in bonds with a minimum size of at least 1 billion RMB and minimum maturity of one year.
