Subject to regulatory approval, the new fund will aim to maximise total return over the long term, consisting of income, capital appreciation and currency gains, by investing in both China-related debt and Renminbi-denominated debt securities.
Chang, who joined Barings from HSBC Global Asset Management in May, hopes to profit from the rapid development in the past 18 months of the offshore Renminbi bond market. This, he says, demonstrates the Chinese authorities’ apparent commitment to open up China’s capital markets and transform the Renminbi into a global currency.
“China’s offshore bond market remains in its early stages, but it is growing at a rapid pace and we believe it represents a new and exciting way for investors to participate in China’s long-term economic expansion,” he said.
“In addition to providing the potential for currency appreciation over the long term, we believe that China bonds also offer attractive income-generating qualities for yield-seeking investors, particularly in the current low global yield environment.”
The new fund follows the recent launch of the Baring Asian Debt Fund, with a further vehicle, Emerging Market Corporate Debt Fund, also due.
