New Listing

Amundi unveils China government bond ETF

Europe’s largest China government bond ETF has seen over $8bn outflows so far in 2022

Jamie Gordon

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Amundi has expanded its fixed-income range with the launch of a China government bond ETF.

The Amundi China CNY Bonds UCITS ETF (CNYF) is listed on the Deutsche Boerse and Boerse Frankfurt with an ongoing charges figure (OCF) of 0.20%.

This is the second-cheapest exposure on the European market after the SPDR Bloomberg China Treasury Bond UCITS ETF (CHNT) which has a total expense ratio (TER) of 0.19%.

CNYF tracks the Bloomberg Barclays China Treasury + Policy Bank index which offers exposure to Chinese government bonds and securities issued by state-owned banks listed on the Chinese interbank market.

To be included in the index, fixed-rate, Treasury and policy bank debt must have a maturity of at least one year to maturity and RMB5bn outstanding volume.

The launch follows a challenging year for China government bond ETFs, with the iShares China CNY Govt Bond UCITS ETF (CCBI) suffering $8.6bn outflows in the first 10 months of the year, according to data from ETFLogic.

Meanwhile, investors chasing the spike in yields across developed market government bonds have poured $7.9bn into the Invesco US Treasury Bond 7-10 Year UCITS ETF and iShares $ Treasury Bond 7-10 UCITS ETF over the same period.

While 10-year China government bonds currently yield 2.90%, the equivalent US Treasury bond yields 3.49%, up from 1.51% at the start of the year.

However, the yield advantage of US Treasuries is already beginning to soften. Highlighting this, 10-year US Treasury yields have dropped 65 basis points since 4 November and as much as 17bps in a day prior to the Federal Reserve's 50bps interest rate increase on Wednesday.

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