Allianz Global Investors launches Renminbi fund

Managed by Helen Lam, the Luxembourg-based fund offers investors a direct, cost-effective and low risk way to benefit from the strenghening of the Chinese Renminbi (RMB) versus the US dollar.

The Allianz RCM Renminbi Currency fund aims to allow investors to participate in the appreciation of the RMB at a lower level of risk. It is intended that the fund will invest 100% in deposits and will be highly liquid. 
 
Hong Kong-based Lam also manages the Allianz RCM Renminbi Fixed Income fund which has been closed at its capacity of €450m. She says despite the recent weakness and volatility in global financial markets, she believes that China remains committed to the gradual appreciation of the RMB given the need to redirect its economic focus from export driven to domestic consumption and to become less reliant on the global economy. 

"In overall terms, the RMB has continued to appreciate while other Asian currencies have experienced a sharp decline since August this year and eroded all the short term gains they had earned against the US dollar in the previous month. As China remains closed in terms of capital accounts and the RMB can only freely flow out of China for trade-related activities, the offshore RMB market is the most cost effective and efficient way for an investor to participate in the RMB appreciation," says Lam.
 
Lam adds: “I believe, offshore RMB deposits are playing an increasingly important role in the Hong Kong financial market and the RMB deposit base has seen exponential growth since its introduction late last year. RMB deposit base accounts are around 600bn at present (approximately 10% of the total Hong Kong deposit base) and we expect this to continue to grow and to reach around 2trn in a year and a half’s time.”
 
It is expected that the volatility of the fund will be low to medium given that the RMB is still controlled by the Chinese authorities who have signaled their support for the gradual appreciation of the currency for the benefit of the Chinese economy.

Allianz Global Investors has received Commission de Surveillance du Secteur Financier (CSSF) approval to launch the Allianz RCM Renminbi Currency fund across Europe.