Yuan Investment Gains Momentum Among Institutional Investors

Yuan investment continues to gain acceptance among institutional investors, with 87% of portfolios now including yuan-denominated assets, according to an HSBC survey covering more than 120 Asia-Pacific investors.

The findings highlight growing confidence in China's financial markets and the expanding role of the yuan in global portfolio diversification.

The survey found that 63% of respondents primarily accessed offshore yuan markets, while 54% invested through Connect programmes including Bond Connect and Stock Connect.

Diversification was identified as the principal reason for yuan investment by 66% of investors, followed by China's importance in global trade and attractive yield opportunities.

Nearly one-third of respondents regarded Chinese government bonds as the preferred yuan-denominated asset class, ahead of A-shares and corporate bonds.

HSBC also found that three in four investors expect yuan investment allocations to increase further over the next 12 to 24 months.