Will Stratton Street’s RMB fund draw mainland money?

As China further relaxes capital controls, the demand for renminbi-denominated investments outside the mainland should grow, argues Stratton Street’s Andy Seaman.

Seaman co-manages the Stratton Street Renminbi Bond Fund, which invests in bonds in Asia and the Middle East and hedges all positions into RMB. He expects recent moves to open China’s financial industry to benefit his strategy.

China’s authorities will be forced to further relax the restrictions on capital flows out of China, according to Seaman, to balance the inflows of foreign investment that are expected as A-shares and Chinese domestic bonds are incorporated into global indices.

The process of A-shares inclusion is well underway, and inclusion of bonds is expected to follow. Bloomberg announced in March that it will add Chinese RMB-denominated bonds to the Bloomberg Barclays Global Aggregate Index, in a gradual process, starting in April 2019.

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Source:https://fundselectorasia.com/will-stratton-streets-rmb-fund-draw-mainland-money/