Asset Management Awards for Excellence 2016 – Best Fund Provider – RMB Bond

CSOP Asset Management

Jack Wang, Deputy CMO, CSOP Asset Management

Jack Wang
Deputy CMO
CSOP Asset Management

Renminbi holders were stunned in 2015 when, after years of betting on the yuan’s appreciation against the Dollar, Chinese authorities decided to devalue the currency. Coupled with turbulence in the equity markets wiping out 40% of the Shanghai benchmark’s value, risk-averse offshore yuan holders that did not wish to realise FX losses risked cash drag or further devaluation. That is unless they opted to test the RMB bond markets, an asset class that remains relatively nascent for many.

For CSOP Asset Management, however, RMB bonds are its bread and butter. The Chinese asset manager registered dominant performance and stellar inflows from private banks in 2015, primarily through its flagship RQFII RMB bond strategy and its RMB bond exchange-traded funds (ETFs).

CSOP Asset Management’s RMB bond strategy, focusing purely on investment grade bonds, ranked second amongst RQFII bond fund peers and first among pure bond fund peers, generating low volatility performance with low correlations to equity markets. The strategy has the highest rate of private wealth penetration compared to its peers, and has garnered critical acclaim in the private banking industry,

In addition to active management, CSOP Asset Management’s RMB bond ETF is both the first and largest passive vehicle invested in the asset class. The product’s tracking error ranks first amongst all RQFII ETFs at 0.64% and is also increasingly used as an underlier for yield-enhancement structured products. And proof of its commitment to the private wealth market, the Chinese asset manager has even implemented quarterly distribution to cater to high net worth individuals’ needs, a step above the typical industry practice of annual or semi-annual distribution.

The management of offshore renminbi will play an increasingly significant role in global capital markets as China realises its ambitions to make the renminbi a fully convertible international currency, and few are better positioned to capture rising demand than this year’s Best Fund Provider – RMB Bond, CSOP Asset Management.