Chinese fixed income products gaining more traction with global investors

Fixed income products from China and other emerging markets could see renewed interest from investors as interest rates and yields from bonds issued by major economies around the world are hitting historic lows due to global uncertainties.

“If investors are relatively prudent, or not positive, on the bond market, they should consider products with relatively high yields, rather than short bonds,” said a recent report from CICC, a Chinese investment banking firm .

“We believe China’s bond yields are still attractive among all major economies. While global bond yields have been falling in the year to date, China’s bonds yields have increased to some extent during this period,” said the CICC report.

“Overseas investors could consider increasing their exposure to Chinese bonds amid falling bond yields in overseas markets,” it added.

“With Chinese government bonds yielding close to 3 per cent (for AA sovereign) the carry alone will be attractive for both European and Japanese investors,” said Andy Seaman partner and chief investment officer at Stratton Street Capital, a London-based fixed-income manager.