Unleash the potential of China bonds BlackRock China Bond Fund

Unleash the potential of China bonds

Target to capture yield and growth opportunities in the evolution of China’s bond market

The rise of China’s bond market to become the world’s second largest1 has been driven primarily by local investors. The next stage of its growth should see more diverse ownership and a closer alignment with international standards, as Chinese securities are increasingly represented in flagship global benchmarks for stocks and bonds.

In this low for longer interest rate environment, income-seeking investors can consider China bonds to deliver potential diversification benefits and added resilience to a global portfolio. China bonds comparatively offer higher yields with muted volatility and have lower correlations to global risk assets. This is especially important during times of extreme market volatility.

>US$14T in size
>US$14T in size1
2nd largest in the world
2nd largest in the world1
18% annualized growth rate
18% annualized growth rate2
<3% foreign ownership
<3% foreign ownership2

BlackRock China Bond Fund Offers:

Relatively attractive monthly income distribution

Ranked 1st quartile
In 1,3,5-year and since inception and Morningstar 5-star rating3
Ranked 1st quartile

Relatively low correlation may offer greater diversification and resilience to your portfolio4

China bonds have lower correlation to different asset classes5 and the Fund's relative short duration can help provide significant diversification with existing fixed income exposure and help investors manage risk, offering greater resilience during market fluctuation.

Low correlation of onshore credit to global risk assets (5-year as of end April 2020)

Low correlation of onshore credit to global fixed income (5-year as of end April 2020)

 

Source: BlackRock, WIND, Bloomberg, end April 2020. China Onshore Credit: China Bond Credit Bond Index; Asian High Yield Credit: JP Morgan Asian non-Investment Grade Index; China USD Credit: JP Morgan China Credit Index; Global IG Corp (USD Hedged): Bloomberg Barclays Global Corporate Index; Global HY Corp (USD Hedged): Bloomberg Barclays Global HY Corporate Index; EM USD Sov/Quasi Credit: JP Morgan Emerging Markets Bond Index; EM Local Currency Bonds: JP Morgan GBI-EM Index; US Equities: S&P 500; Asian Equities: MSCI AxJ.

The strong performance of BlackRock China Bond Fund over global flexible bonds funds over the past three years has been balanced with lower volatility and drawdowns. 

Resilience to your portfolio


Source: Blackrock, Data as of end Mar 2020. The returns are calculated based on A6 USD-H share class (Inception date: 4 July 2018). and prior to July 2018 the A2 CNH shareclass, hedged back to USD (using the daily hedging costs). Performance of the respective share classes, are net in share class currency on a NAV pricing with income reinvested as at end Mar 2020. Performance after maximum 5% Front End Load: A6 USD-H:YTD:-5.4%, 2019: 3%, 2018: -2.6% (inception to year end); A2 CNH:YTD:-5.1%, 2019:3.4%, 2018:-1.8%, 2017:3.4%, 2016:-0.6%.

The examples provided are strictly for illustrative purposes only and serves as a general summary. It is not exhaustive and should not be construed as investment advice or recommendation. The solutions are based on the specific allocations and outcomes are unique. Past performance is not a guide to future performance. Investors may not get back the full amount invested. Quartiles: Morningstar. Category: Morningstar’s USD Flexible Bond. Peer comparison shown is for illustrative purposes only and does not purport to compare all funds in the same investment universe nor does it compare all characteristics of the funds shown. Reference to the name of the funds should not be constructed as investment advice or investment recommendation of those funds

A "go-anywhere" strategy with cross-border RMB bond offering
Have the ability to invest tactically across the onshore and offshore RMB bond markets, the offshore Dim-sum market and hard currency China credit market to take advantage of the potential attractive valuations depending on different market environment.
Choice Arrow
You don’t have to look far to find the income you need.