CGS International Securities has launched an exchange-traded fund tracking the CFETS-CGS Belt and Road Theme Bond Index. The ETF started trading on the main board of the Singapore Exchange on Thursday ( October 15 ), after its initial offer period closed on October 9.
The index was jointly developed by China Galaxy Securities ( CGS ) and the China Foreign Exchange Trade System ( CFETS ), which runs the trading platform for China’s interbank bond and currency markets.
Industrial and Commercial Bank of China ( ICBC ) Singapore Branch serves as the investment adviser to the fund, providing professional investment advisory support by leveraging its expertise in China’s onshore bond market and cross-border investment. ICBC Singapore Branch also serves as one of the fund’s participating dealers.
Units trade in board lots of one unit, with North Point Global as the designated market maker. The fund raised approximately S$57 million ( US$44.44 million ) during the initial offer period, at S$1 per SGD unit and 10 yuan ( US$1.49 ) per RMB unit.
The Belt and Road Initiative ( BRI ) is a development and economic cooperation initiative launched by China in 2013 to promote regional connectivity, trade and investment. The index is made up of BRI-related bonds traded in the China Interbank Bond Market ( CIBM ), mainland China’s main bond market. These include Panda bonds, which are RMB bonds issued in mainland China by entities based outside China.
Through the fund, investors can gain convenient access to a diversified portfolio of BRI-related bonds through a single SGX-listed instrument. The fund accesses the CIBM through China's Qualified Foreign Investor scheme, which allows approved overseas institutions to invest in China's domestic markets.
The fund’s holdings will be listed in its monthly factsheet on the manager’s website. Investors can buy and sell SGD or RMB units on SGX. The manager currently intends to pay distributions twice a year, at its discretion, around June and December.
CGS president Xue Jun comments: "Previously, overseas investors who wanted to invest in China’s interbank bond market typically had to be qualified institutions, and to participate in cash bond trading through established regulatory access schemes. From today, investors in Singapore can hold a portfolio of onshore RMB bonds related to the BRI through a single listed product, traded in Singapore dollars or renminbi. With this, investors can capture growth opportunities across Asia while positioning for the continued internationalization of the renminbi.”
ICBC senior executive vice president Zhang Weiwu adds: “The launch of this ETF marks an important milestone in China–Singapore financial cooperation. It reflects the strong collaboration among financial institutions and market participants, while providing global investors with enhanced access to RMB assets.”
