Manulife Asset Management unveils new offshore RMB fund in response to growing demand in Hong Kong and Asia.

Manulife Asset Management has expanded its fund offering in Hong Kong with a new product that will invest in Renminbi-denominated debt securities.

The Manulife MPF RMB Bond Fund will be available starting 16 December 2013 and will operate under the Manulife Global Select Scheme, the firm said in a statement. It is designed for members who seek longer-term investments and aims to seek returns through capital appreciation and income generation. It will focus mostly on dimsum bonds issued, traded or distributed by governments, banks and corporations outside Mainland China. 

"Offshore RMB bonds appear relatively attractive based on average current yield of 3.53 per cent and the potential for continued currency appreciation. The offshore RMB has appreciated 2.5 per cent against the US dollar year-to-date in 2013 and we expect it to remain on an upward trend, appreciating 1 per cent to 2 per cent per annum in the long term," said Ronald KT Chan, managing director and senior portfolio manager for fixed income at Manulife AM (Asia).

According to the firm, the offshore RMB bond market has expanded by almost 40 per cent so far in 2013 to be worth around $84 billion.