China bonds offer good yields and have defensive characteristics.
Investors look for diversification and low volatility and Chinese bonds score well on these two measures.
Over the years, Western bond markets have become much more correlated with each other, but that's not really the case with China.
And it’s a similar picture when it comes to market volatility, which have stayed comparatively stable as volatility on world markets has ticked up.
Hayden: China bonds are a stand out for investors looking for yield and stability.
China bond market is a top performer, with attractive yields
These factors are bolstering the case for Chinese government bonds as a safe haven. And if we look at performance over the past year, China has outperformed in terms of total return.
Additionally, yields of between 2% to 3% currently look highly attractive compared to the zero to negative yields available in most developed markets around the world.
Don't wait for global indexes to add China bonds
Most people around the world have a zero to low allocation to Chinese bonds. If investors are waiting for global indexes to factor China bonds at the weight that reflects China's significance in the global economy, they will have a long time to wait.
Perspectives matter. Tune in to our insights.