Philip Saunders – Market reaction to Fed announcement
Philip Saunders discusses the market reaction to the recent announcement from the US Federal Reserve Bank.
Jun 11, 2020
China’s bond markets cover a large and increasingly diverse opportunity set, offering a range of potential benefits to investors.
The opening of these markets to foreigner investors in recent years has spurred a trend for increased allocations. This shifted up a gear in February, when liquid CNY-denominated China government bonds joined JP Morgan’s suite of emerging market indices.
Although it is growing, exposure to China fixed income is still relatively low in global bond portfolios. Yet the asset class brings various potential benefits to investors’ portfolios, including a higher risk premium relative to other bond markets and a low correlation with other asset classes.
We believe the structural shift of investment allocations towards the asset class is likely to accelerate as China’s debt markets become increasingly integrated into the global mainstream.