Citi said that it has introduced the Chinese Government and Policy Bank Bond Index, to expand its range of onshore and offshore local currency Chinese bond indices.
The group commented that the Chinese bond market is becoming an increasingly important asset class for global investors. Based on observations of fund products tied to the Citi Dim Sum (Offshore CNY) Bond Index, the products’ assets under management have nearly quadrupled in the past year alone. Also, Citi’s onshore index, the Chinese Government Bond Index, has drawn attention from creators of investable products.
“We witnessed a surge of interest in offshore investment opportunities when financial reforms opened access to global investors,” said Susan Lin, head of Citi fixed income indices and the yield book in Asia Pacific. “With the onshore market at roughly US$4 trillion and growing, we are confident that our latest addition will draw similar interest from product providers and investors alike.”
The Citi Chinese Government and Policy Bank Bond Index measures the returns of yuan (CNY)-denominated fixed-rate book-entry government bonds and policy bank bonds issued in mainland China. The eligible Chinese policy bank bonds are those issued by the China Development Bank (CDB), the Agricultural Development Bank of China (ADBC), and the Export-Import Bank of China. These policy banks are state-owned and their objectives typically include providing social benefit, stimulating the economy and supporting growing local industries.
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