Best Fund Provider China Bond
BlackRock
Best Fund Provider – China Bond
Yii Hui Wong
portfolio manager, China Fixed Income
“We are delighted to be awarded the “Best Fund Provider – China Bond”. This award acknowledges our deep expertise and disciplined investment process and honours our dedication in delivering investment excellence for our clients. Amid an extremely challenging 2022, we managed to deliver resilient performance and remained focused to seek maximised total return while managing volatility.
China continued to be an integral and critical part of the global fixed income landscape. The divergent monetary policy between China vs. Developed Markets contributed to the outperformance of China onshore bonds this year, which makes it an effective diversifier on back of the unsynchronized economic cycle between China vs. DMs. Our “go-anywhere” strategy ability to dynamically allocate capital between uncorrelated onshore and offshore enables us to achieve diversification and to capture high income.
We believe we are well positioned to uncover attractive opportunities and capture competitive risk-adjusted returns to our investors. We look forward to stronger partnership with our private bank clients as we strive to deliver investment excellence.”
Winnersrationale
While the slump in the high-yield market was affecting investor sentiment in the China credit market, BlackRock managed to mitigate the drawdown of its flagship China Bond Fund, providing resilient performance for China credit investors.
With an unconstrained approach, the BlackRock Global Funds – China Bond Fund uses a “go-anywhere” strategy in their cross-border RMB bond offering. To take advantage of the potential attractive valuations across different market environments, the fund invests tactically across the onshore RMB bond market, offshore RMB bond market, and the offshore hard currency China credit market.
BlackRock has investment professionals sitting in both onshore and offshore markets, providing the China Bond Fund with full access to all Chinese bond markets – CNY, CNH and USD, with no bias between sovereign and credit strategies. It is highly diversified with 570 holdings, as of end August 2022.
The fund gained initial traction in periods of market stress due to the fund’s ability to offer competitive yields while delivering resilient performance with much lower drawdown than global counterparts.
As of the end of August 2022, the benchmark-agnostic BlackRock Global Funds – China Bond Fund returned negative 2.87% year-to-date. On a one-, three- and five-year basis, it returned -6.6%, 1.71% and 3.23% respectively in offshore RMB annualized terms. As of end August 2022, the fund’s portfolio yield was also at attractive levels of 6.6% in base currency (RMB) terms and 7.3% in USD hedged terms.
The BlackRock Global Funds – China Bond Fund has grown tremendously by about 13× in size since March 2020 to become the largest China bond strategy in the market with AUM standing at CNH 38.5 billion — or about US$5.6 billion as of end August 2022, driven by investor search for income and diversification in increasingly volatile markets.
BlackRock wins Best Fund Provider – China Bond in Asian Private Banker’s 2023 Asset Management Awards for Excellence.
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