- ICBC CSOP FTSE Chinese Government Bond Index ETF will list (ticker: USD counter:CYB/ SGD counter:CYC) on Singapore Exchange (“SGX”) on September 21 2020
- CYB/CYC to directly invest into China onshore government bonds, aiming to help capture opportunities brought by China’s bond inclusions into global indices
- China onshore bonds market to present attractive opportunities to local investors
SINGAPORE--(BUSINESS WIRE)--CSOP Asset Management Pte. Ltd. debuts its first ETF - ICBC CSOP FTSE Chinese Government Bond Index ETF (ticker: USD counter: CYB/ SGD counter: CYC) in Singapore in partnership with ICBC Asset Management.1 Operating since April 2019, CSOP Asset Management is bringing its leading expertise and experience in ETF management to investors in Singapore. The CYB/CYC offers the opportunities for investors to access the fast growing China onshore bond market. CYB/CYC will adopt a representative sampling strategy to replicate as closely as possible the performance of the FTSE Chinese Government Bond Index to achieve its investment objective. Denominated in RMB, CYB/CYC can be created and redeemed in both USD and RMB in primary market. Post listing, the CYB/CYC trades in both USD and SGD at board lot size of 10 shares. As the first SGX-listed ETF investing directly in China onshore bond market, CYB/CYC has attracted a number of institutional investors and USD675, 571,000 investment, marking it one of the ETFs with a significantly large initial size on SGX,and also the world’s largest Chinese pure government bond ETF.
China onshore market has become too important to ignore. The size of China bond market has already reached USD15 trillion, the second largest bond market in the world, trailing behind US2. With China’s onshore bond market further opening up, it presents attractive opportunities to global investors. Historical data suggested that the China onshore bonds offer a higher yield3 with a relatively lower exchange rate volatility compared to other major economies.4 In addition, the low correlation between China onshore bonds and global bonds would potentially provide greater portfolio diversification for investors.5 Worth mentioning, in the past few years, foreign investment continued to flow into China onshore market. Even though foreign institutions held more than CNY2.8 trillion (over USD400 billion) of onshore Chinese bonds as of August 2020, which was four times more than the amount held in 2015, the foreign holding of China onshore bonds was still below 3% severely under invested by global institutions.6 If the Chinese onshore bonds are included in the three major global indices, it is expected to attract about USD320 billion of inflows into China onshore bond market in aggregate.7 The market discussion on the upcoming announcement by FTSE Russell on the potential inclusion of China onshore bonds reflects optimism and its readiness to be included in foreign investors’ asset allocation. In anticipation of the upcoming announcement from FTSE Russell on highly possible inclusion of China onshore bonds, it is deemed a good timing for investors to tap into the China onshore bonds market.
Loh Boon Chye, Chief Executive Officer of SGX, said, “We are honoured that CSOP Asset Management, a well-known ETF leader in Asia, has picked SGX to be the listing venue of choice for their landmark ETF. SGX provides a multi-asset platform that supports the internationalisation of China and investor access to Asia’s largest economy. Global fixed income investors have been turning to Chinese sovereign bonds for added diversification and yields, and this product is a strong addition to our platform. SGX will continue to work with issuers and business partners to develop a multi-asset ETF product shelf that meets the demands of the investment community.”
Mr. Gu Jian’gang, Chairman of ICBC Wealth Management said “We are glad to cooperate with leading business partners like CSOP to continuously provide high-quality services to global investors! I hope ICBC CSOP FTSE Chinese Government Bond Index ETF listed on SGX will contribute to the internationalization of RMB and the development of Singapore's offshore RMB market. China’s financial market is continuously opening and it welcomes global investors. We look forward to a win-win cooperation with all parties! “
“I am confident that the ICBC CSOP FTSE Chinese Government Bond Index ETF will offer global investors an efficient and competitive investment tool for their asset allocation on Chinese government bonds. As one of the major participants of the ETF, ICBC (Asia) will continue to deliver high-quality asset management solutions globally.” Commented by Ms. Gao Ming, Chairman and Executive Director of ICBC (Asia) Ltd.
CSOP Asset Management Limited, the parent company of CSOP Asset Management Pte. Ltd., best known as the first Chinese offshore asset manager as well as an ETF leader in Asia is confident on the listing of CYB/CYC. Mr. Zhou Yi, Chairman of CSOP Asset Management Limited comments “We are very glad to bring our first SGX listed ETF product to global investors. CYB/CYC is designed to help capture the investment opportunities brought by the booming China onshore bond market in view of the market discussion of the potential inclusion into the global indices. Ms. Ding Chen, CEO of CSOP Asset Management, adds “We believe this China-themed fixed income ETF with relatively low cost, easy access and diversified bond holdings will suit the local investors’ demand of seeking for a relatively stable yield.”
For details, including risk factors, please refer to the prospectus and product highlights sheet.
About CSOP Asset Management Limited
CSOP Asset Management Limited (“CSOP AML”) was founded in 2008 as the first offshore asset manager set up by a regulated asset management company in China. With a dedicated focus in China investing, CSOP AML manages public and private funds, as well as providing investment advisory services to Asian and global investors. In addition, CSOP AML is best known as an ETF leader in Asia. CSOP Asset Management Pte. Ltd. (“CSOP SG”) was established as wholly-owned subsidiary of CSOP AML in 2019, with a view of having Singapore as the regional base to facilitate and offer clients in the Region with investment opportunities in China’s capital market. As of 31 July 2020, CSOP had US$ 8.2 billion in assets under management.
About ICBC Wealth Management
ICBC Wealth Management is a wholly-owned subsidiary of the Industrial and Commercial Bank of China, with a registered capital of ¥16 billion and registered in Beijing. ICBC Wealth Management is the largest banking wealth management subsidiary in China, mainly engaged in issuing public wealth management products, issuing private wealth management products, investment advisory and other asset management related businesses.
About ICBC Asset Management (Global) Company Limited (ICBC Asset Management (Global)):
ICBC Asset Management (Global) is the wholly-owned subsidiary of ICBC(Asia) Ltd and positioned as the overseas asset management hub of ICBC Group. The company is regulated by the Securities and Futures Commission of Hong Kong to carry out advising on securities (Type 4), advising on futures contracts (Type 5) and asset management (Type 9) regulated activities. The professional teams of the company specialize in money market, fixed income, equity and alternative investment, committed to delivering cross-border asset management products and services by leveraging extensive expertise and resources of ICBC.
This publication is prepared for the use of presentation, illustration and discussion only and is not to be relied on as investment, legal, tax or other advice as it does not take into account the investment objectives, financial situation or particular needs of any specific investor. CSOP Asset Management Pte. Ltd. (“CSOP”) believes that information in this publication is based upon sources that are believed to be accurate, complete, and reliable. However, CSOP does not warrant the accuracy and completeness of the information, and shall not be liable to the recipient or controlling shareholders of the recipient resulting from its use. CSOP is under no obligation to keep the information up-to-date. The provision of this publication shall not be deemed as constituting any offer, acceptance, or promise of any further contract or amendment to any contract. The information herein shall not be disclosed, used or disseminated, in whole or part, and shall not be reproduced, copied or made available to others without the written consent of CSOP. Nothing herein shall be construed as granting the recipient, explicit or implicit, any license or right to the information in this publication. The content of the publication should not be considered as an offer or solicitation to deal in any investment products and/or an investment recommendation. Advice should be sought from a financial adviser regarding the suitability of the investment and/or investment product before making an investment. Investment involves risk. The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not necessarily indicative of future performance. Investor should read the prospectus and product highlights sheet, which can be obtained on CSOP website, before deciding whether to invest. This publication has not been reviewed by the Monetary Authority of Singapore.
Issuer: CSOP Asset Management Pte. Ltd.
1 ICBC Wealth Management and ICBC Asset Management (Global) are the investment advisors of the ICBC CSOP FTSE Chinese Government Bond Index ETF
2 Bloomberg, as of June 30, 2020
3 Bloomberg, annual yield of GCNY10YR Index (3.1083%) compared with USGG10YR Index(0.6868%), GJGB10 Index(0.043%) and GDBR10 Index(-0.4433%), as of September 2020
4 Bloomberg, based on the three-year historical volatility of GBP, JPY and EUR as of September 2020
5 Bloomberg, correlation matrix of FTSE China GBI USD, FTSE US GBI LCL, FTSE EMU GBI USD, FTSE UK GBI USD and FTSE Japan GBI USD, as of September 2020
6 CCDC and Shanghai Clearing, as of August 2020
7 FTSE, Bloomberg, JPMorgan, UBS estimates as of 7 September 2020