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Asian Fixed Income Investment Center
Your go-to resource center for the latest market insights and information on BlackRock’s range of Asian fixed income solutions.
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Important
1. The China Bond Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in fixed income transferable securities denominated in Renminbi or other non-Chinese domestic currencies issued by entities exercising the predominant part
- The China Bond Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in fixed income transferable securities denominated in Renminbi or other non-Chinese domestic currencies issued by entities exercising the predominant part of their economic activity in the PRC through recognised mechanisms including but not limited to the Chinese Interbank Bond Market, the on exchange bond market, quota system and/or through onshore or offshore issuances and/or any future developed channels. The Fund is a RQFII Access Fund and a CIBM Fund and may invest without limit in the PRC via RQFII Quota and in the CIBM via the Foreign Access Regime and/or Bond Connect and/or other means as may be permitted by the relevant regulations from time to time.
- The Asian Tiger Bond Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in the fixed income transferable securities of issuers domiciled in, or exercising the predominant part of their economic activity in, Asian Tiger countries. The Fund may invest in the full spectrum of available securities, including non-investment grade. The currency exposure of the Fund is flexibly managed.
- The Asian High Yield Bond Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in high yield fixed income transferable securities, denominated in various currencies, issued by governments and agencies of, and companies domiciled in, or exercising the predominant part of their economic activity in the Asia Pacific region. The Fund may invest in the full spectrum of permitted fixed income transferable securities and fixed income related securities, including non-investment grade. Currency exposure is flexibly managed.
- The China Bond Fund may invest in debt securities that are subject to actual or perceived ratings downgrade. An increase in interest rates may adversely affect the value of the bonds held by the Fund. The Fund may invest in non-investment grade and unrated bonds that may be subject to higher default, volatility and liquidity risks. The Fund invests in bonds issued or guaranteed by governments or authorities, which may involve political, economic, default or other risks. The Fund may invest in urban investment bonds issued by Chinese local government financing vehicles (“LGFVs”) that are subject to default risk of the LGFVs.
- The China Bond Fund is subject to restrictions and requirements applicable to the Renminbi Qualified Foreign Institutional Investor (“RQFII”) investments, which may adversely affect the fund’s value due to regulatory uncertainties. The Fund is subject to risks associated with investment in the China Interbank Bond Market.
- The China Bond Fund's investments are concentrated in People’s Republic of China (PRC). This may result in greater volatility than more broad-based investments. The Fund invests in certain emerging markets and may be subject to political, tax, economic, social and foreign exchange risks.
- The China Bond Fund is subject to PRC tax risks, currency risks, securities lending counterparty risks, foreign investments restrictions risks, currency control/ conversion risks and currency hedging risk.
- The Asian Tiger Bond Fund may invest in debt securities that are subject to actual or perceived ratings downgrade. The Fund invests in certain emerging markets and may be subject to political, tax, economic, social and foreign exchange risks. An increase in interest rates may adversely affect the value of the bonds held by the Fund. The Fund may invest in non-investment grade and unrated bonds that may be subject to higher default, volatility and liquidity risks. The Fund invests in bonds issued or guaranteed by governments or authorities, which may involve political, economic, default or other risks.
- The Asian Tiger Bond Fund is subject to currency risk, foreign investments restrictions risk, geographical concentration risk in Asian Tiger countries, liquidity risk, securities lending counterparty risk, currency conversion risk including Renminbi denominated Classes and contingent convertible bonds risk.
- The Asian High Yield Fund may invest in debt securities that are subject to actual or perceived ratings downgrade. An increase in interest rates may adversely affect the value of the bonds held by the Fund. The Fund may invest in non-investment grade and unrated bonds that may be subject to higher default, volatility and liquidity risks. The Fund invests in bonds issued or guaranteed by governments or authorities, which may involve political, economic, default or other risks.
- The Asian High Yield Fund is subject to currency risk, geographical concentration risk in Asia, emerging market risk, securities lending counterparty risk, currency conversion risk including Renminbi denominated Classes, foreign investments restrictions risk and contingent convertible bonds risk.
- Class 6 Sharespay dividends gross of expenses and/or from capital at the Directors’ discretion. Class 8 Shares pay dividends gross of expenses and/or from capital at the Directors’ discretion and include interest rate differentials arising from share class currency hedging. Negative interest rate differentials may decrease the dividends paid. Paying dividends gross of expenses may result in more income being available for distribution; however these shares may effectively pay dividends from capital – may amount to a partial return or withdrawal of an investor’s original investment or capital gains. All declared dividends result in an immediate reduction in the NAV price of the share class on the ex-dividend date.
- The Funds may use derivatives for hedging and for investment purposes. However, usage for investment purposes will not be extensive. The Fund may suffer losses from its derivatives usage.
- The value of the Funds can be volatile and can go down substantially within a short period of time. It is possible that a certain amount of your investment could be lost.
- Investors should not make investment decisions based on this document alone. Investors should refer to the Prospectus and Key Facts Statement for details including risk factors.
Why invest in Asian Fixed Income?
Asian Fixed Income 2022 Midyear Outlook
Venn Saltirov, Portfolio Manager and ESG Investment Lead for Asia Credit, BlackRock
We believe it’s important for income investors to have a quality bias without taking on excessive duration risk.
Central banks today are faced with the difficult task of tamping down runaway inflation while minimizing the economic impact of raising rates.
Overall, we think Asia credit sits at a sweet spot.
It offers average investment grade credit exposure, attractive yields and a shorter duration versus global investment grade credit.
In addition, Asian credit benefits from the strong presence of sovereign and quasi-sovereign issuers in the market with resilient fundamentals against any potential economic slowdown.
Asian fixed income strategies with an ESG overlay have proven to be more defensive in recent market volatility.
We have a strong conviction on the influence of ESG factors in Asian Credit and believe that investing through an ESG lens adds a positive layer to the investment process.
What is your outlook on China for the rest of 2022
Yii Hui Wong, Portfolio Manager, China Fixed Income, BlackRock
As China gradually opens up from lockdowns, we expect investor sentiment to turn more positive in the second half.
China credit remains our top pick, especially onshore CNY credit.
It serves as an effective diversifier in a global portfolio and has benefited from the country’s stable inflation levels and supportive policies.
Given low inflation in China, ambitious growth targets and supportive statements made by multiple top authorities, we think monetary policy will remain accommodative.
Investors benefits from 2 layers of diversification when investing in China bonds.
Firstly, CNY credit has seen positive performance and outperformed other key global asset classes across recent periods of major global market shocks. It has proven to be a powerful tool to build resilience in a global portfolio.
Secondly, the low correlation between onshore CNY and offshore China USD credit market allows us to reduce portfolio volatilities and generate alpha through dynamic asset allocation.
China continues to offer attractive yields at low duration.
Our ability to dynamically invest across onshore and offshore credits allow us to capture dislocation opportunities to maximize yields without introducing extra credit risks.
Relative attractive yields
Asian credit continue to provide higher yields than global counterparts1
Relatively stable macro-economic fundamentals in Asia
Default rates continue to be low outside of the offshore China space2; macroeconomic fundamentals remain encouragingly resilient
A united focus on growth in China
Ambitious targets and supportive statements from top authorities suggest support for China fixed income in both monetary and fiscal terms
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BlackRock China Bond Fund
Target to capture yield and growth opportunities in the development of China bond market
5.5 p.a. (A6 RMB as of 30 June 2022)
A6 share class aims to pay a dividend on a monthly basis. Dividend Payment is not guaranteed and is not indicative of the return of the Fund. The Fund may effectively pay dividend from capital. See important information 12 3
BlackRock Asian Tiger Bond Fund
Enjoy Asian credit's competitive yields and appreciate the potential of the region’s improving macroeconomic and corporate fundamentals
5.4% p.a. (A6 USD as of 30 June 2022)
A6 share class aims to pay a dividend on a monthly basis. Dividend Payment is not guaranteed and is not indicative of the return of the Fund. The Fund may effectively pay dividend from capital. See important information 12 5
BlackRock Asian High Yield Fund
A high income strategy combined with an opportunistic approach for growth
9.9% p.a. (A6 USD as of 30 June 2022)
A6 share class aims to pay a dividend on a monthly basis. Dividend Payment is not guaranteed and is not indicative of the return of the Fund. The Fund may effectively pay dividend from capital. See important information 12 6
Related Insights
China Bond Market 2022 Midyear Outlook
Yii Hui Wong, Portfolio Manager, China Fixed Income, BlackRock
As China gradually opens up from lockdowns, we expect investor sentiment to turn more positive in the second half.
China credit remains our top pick, especially onshore CNY credit.
It serves as an effective diversifier in a global portfolio and has benefited from the country’s stable inflation levels and supportive policies.
Given low inflation in China, ambitious growth targets and supportive statements made by multiple top authorities, we think monetary policy will remain accommodative.
Investors benefits from 2 layers of diversification when investing in China bonds.
Firstly, CNY credit has seen positive performance and outperformed other key global asset classes across recent periods of major global market shocks. It has proven to be a powerful tool to build resilience in a global portfolio.
Secondly, the low correlation between onshore CNY and offshore China USD credit market allows us to reduce portfolio volatilities and generate alpha through dynamic asset allocation.
China continues to offer attractive yields at low duration.
Our ability to dynamically invest across onshore and offshore credits allow us to capture dislocation opportunities to maximize yields without introducing extra credit risks.
2022 China bond market midyear outlook
China bond continues to offer attractive yields at low duration. It serves as an effective diversifier in a global portfolio and has benefited from the country’s stable inflation levels and supportive policies.
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© 2023 BlackRock, Inc. All rights reserved.
1 Source: BlackRock, as at 30 June 2022. Indexes are unmanaged and one cannot invest directly in an index. For illustrative purpose only. Based on the Bloomberg Barclays Multiverse Index.
2 Year-to-date onshore High Yield default as of end June 2022 is less than 0.3%. Source: Wind, as of end June 2022.
3Latest dividend yields of A6 RMB share class (30 June 2022). A6 share class aims to pay a dividend on a monthly basis. Dividend Payment is not guaranteed and is not indicative of the return of the Fund. A6 share class annualized yield = (Dividend rate/ex-date NAV) * (12*100). The Fund may effectively pay dividend from capital. Past performance is not a guide to future performance. Investors may not get back the full amount invested.
4 Source: BlackRock, December 2021. For illustrative purpose only. Investment involves risk. Diversification may not fully protect you from market risk. Past performance is not an indication of future performance. Subject to changes based on market conditions.
5,6 Latest dividend yields of A6 USD share class (30 June 2022). A6 share class aims to pay a dividend on a monthly basis. Dividend Payment is not guaranteed and is not indicative of the return of the Fund. A6 share class annualized yield = (Dividend rate/ex-date NAV) * (12*100). The Fund may effectively pay dividend from capital. Past performance is not a guide to future performance. Investors may not get back the full amount invested.
In Hong Kong, this material is issued by BlackRock Asset Management North Asia Limited. This material and the BlackRock website (www.blackrock.com/hk) have not been reviewed by the Securities and Futures Commission of Hong Kong. For Hong Kong investors, please refer to the BlackRock Global Funds Prospectus for details, including risk factors The Funds mentioned in this material are Funds of BlackRock Global Funds.
Investment involves risks. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Investors may not get back the amount they invest.
Changes in the rates of exchange between currencies may cause the value of investments to go up and down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.
The above warnings are explained in greater detail in the fund specific risks in the current Prospectus and you should read them before investing. This material is for informational purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock Group funds and has not been prepared in connection with any such offer.
Subject to the express requirements of any client specific investment management agreement or relating to the management of a fund, we will not provide notice of any changes to our personnel, structure, policies, process, objectives or, without limitation, any other matter contained in this document.
BlackRock Global Funds (BGF) is an open-ended investment company established in Luxembourg which is available for sale in certain jurisdictions only. BGF is not available for sale in the U.S. or to U.S. persons. Product information concerning BGF should not be published in the U.S.
Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are for illustrative purpose only. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. Unless otherwise specified, all information contained in this document is current as of March 2022.
No part of this material may be reproduced, stored in retrieval system or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written consent of BlackRock. © 2022 BlackRock, Inc. All rights reserved. BlackRock is a registered trademark of BlackRock, Inc. All other trademarks are those of their respective owners.
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