SHANGHAI (Reuters – An onshore China bond fund listed in Hong Kong saw its size rise 10-fold during the month of February due to strong inflows. This reflects growing foreign interest at the second-largest bond market in the world, according to its asset manager.

After attracting substantial investments from institutional investors and CSOP Asset Management Ltd stated in a statement, the CSOP Bloomberg China Treasury+ Policy Bank Bond Index Index (ETF) saw its assets under management (AUM), reach more than 5 Billion Yuan ($784.61 Million).

The yuan-denominated bond ETF “helps further enrich the （yuan) product range in Hong Kong to meet international investors’ demand for RMB asset allocation,” Gao Ming, chairman and executive director of ICBC (Asia), whose asset management unit is an adviser to the ETF, said in the statement.

A separate official of the company stated that net flows for the month ended March 31st exceeded 4.5 billion Yuan.

The ETF was listed as soon as February 2014. It has earned returns of 30.54% since then, according to the company.

Russell’s global flagship index, CSOP’s China Bond ETF, saw an increase in AUM as it added Chinese government bonds last month.

The sale also came as China sold offshore sovereign bonds to Hong Kong last week, underscoring foreign confidence in China despite China’s economic slowdown.

While the spread between China’s 10-year Treasury Bonds and U.S. counterparts has narrowed in recent months, it still remains attractive for yield-seeking international investors at around 1.3 percent.

“The China-onshore bonds provide a higher yield but with a relative lower volatility in exchange rates than major economies,” CSOP Asset Management stated in the statement.

“In addition to this, investors could benefit from a lower correlation between China-onshore bonds and international bonds. This would allow them greater portfolio diversification.”

At the end October, Chinese government bonds were held by foreign investors in a value of total 2.3 trillion Yuan. This was the highest record level and an increase of 1.06% over a month ago.

($1 = 6.3726 yuan)