Chinese Assets

Investors across the world have shown intentions to increase their allocations in Chinese fixed income assets over the next three years, according to a new U.S. study on global fixed income.

The annual Global Fixed Income Study found that 58 percent of the participating asset owners in North America plan to increase allocations to China over the next three years, according to a briefing on March 18 by Invesco, a U.S. independent investment management company.

The study was conducted through face-to-face interviews with 145 investors across North America, Europe, the Middle East, Africa and the Asia-pacific region, who are responsible for the fixed income components of portfolios totaling $14.1 trillion in assets under management as of June 30, 2018.

In the search for an enhanced yield and diversification, “Chinese fixed income allocations are set to grow as investors look beyond trade and geopolitical issues,” said the briefing.

While recognizing China’s underrepresented bond portfolios, especially its role in the global economy and the size of its debt market, “32 percent of fixed income investors globally intend to increase their allocations to China over the next three years,” it said.

Invesco also found that 51 percent of global investors had plans to add Chinese fixed income assets as a longer-term strategic decision, which will be underpinned by the increased weighting of China in major fixed income indices expected in 2019 and beyond.