Barclays Capital Fund Solutions, the asset management arm of Barclays Capital, is rolling out a fund tapping into China’s growing offshore bond market.

The Barclays RMB Bond Fund aims to get exposure to the Chinese currency via RMB-denominated and RMB-hedged debt securities, BCFS said yesterday.   

The fund, launched in Singapore in May 2011, invests in RMB-denominated fixed income securities and deposits issued by a range of organisations, including governments and private firms. Securities may be issued and/or distributed in Hong Kong, Singapore and other jurisdictions, and may be settled in RMB or other currencies.

The rise of China’s economy, and the expansion of its offshore bond market, is drawing growing interest from wealth managers and other financial firms. In January, Hong Kong signed a deal with London aimed at helping turn the UK capital into an offshore trading centre for the renminbi. The Chinese economic planning body has given ten Mainland banks the go-ahead to issue RMB bonds in Hong Kong.

In terms of primary bond issuance, the fund added international names including British Petroleum (BP) and Air Liquide – the industrial gas company – to the portfolio of investments. (Both are rated A by Standard & Poor’s). As for secondary bond issuance, it has added exposure to VTB Bank (BBB-rated by S&P), and short-dated debt issued by Industrial and Commercial Bank of China (ICBC) and Bank of China, which are both currently rated A by S&P.

Sterling-denominated share classes in the fund are open for a minimum of £100,000 ($158.100) for institutions and £1,000 for individuals.

BCFS oversees more than $6 billion of assets. Barclays Capital is part of Barclays, the UK banking group.