ETF Idea Why it is still a good time to consider Chinese go | FSMOne SG - Research Highlights

ETF Idea

Why it is still a good time to consider Chinese government bonds

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• From a monetary policy perspective, China is in a different place as compared to the rest of the world. It is likely to keep an easy monetary policy in order to stabilise the economy, which would bode well for the prices of Chinese government bonds (CGBs).

• Unlike the US, China’s inflation remains manageable. CGBs are offering higher as well as positive real yields, which is rare to find in most major economies these days.

• Historically, CGBs have shown low correlation with global peers as their performance is mainly driven by domestic factors. This provides investors with diversification benefits.

• The ICBC CSOP FTSE Chinese Government Bond Index ETF (SGX:CYC) provides investors with a pure-play exposure to CGBs. In comparison to peers, the ETF comes with a lower expense ratio, and also stacks up well in terms of other measures such as liquidity.

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: ICBC CSOP FTSE Chinese Government Bond Index (SGX:CYC)