China ETF specialist KraneShares has launched its first China fixed income ETF in Europe.

The KraneShares Bloomberg Barclays China Bond Inclusion UCITS ETF (KBND) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.35%.

KBND tracks the Bloomberg Barclays China Treasury and Policy Bank 9% Capped index which tracks the performance of China’s onshore renminbi-denominated government and policy bank bond market.

This includes bonds issued by China’s Ministry of Finance and government-owned banks based in China.

Bloomberg began including Chinese RMB-denominated government and policy bank securities into its global aggregate index in April 2019.

With a phasing period of 20 months, Bloomberg forecasts the inclusion to attract roughly $150bn of fund inflows into China’s $13trn bond market.

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Jonathan Krane, CEO of KraneShares, said: "With attractive yields and low correlations relative to other government bond markets, China fixed income presents a compelling opportunity,"

KraneShares’ UCITS offering Europe also include a core equity A-Shares ETF and two thematic ETFs offering exposure to the Chinese internet industry and environmental, social and governance (ESG) leaders.

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