News / Onshore Chinese bonds and equities: too big to ignore – JP Morgan

Onshore Chinese bonds and equities: too big to ignore – JP Morgan

30.09.2020: 14.30 – 15.00

While China’s equity and bond markets are the world’s second largest, international investors are only just discovering the onshore markets as they open with Stock, and now, Bond Connect.  Onshore Chinese equities and bonds provide unique diversification benefits with attractive yields and potential for currency appreciation.  Strategic competition between China and the US is the new normal, and better understood by markets compared with trade frictions in 2018.  Importantly, the Chinese economy was ‘first-in first-out’ with respect to COVID-19 and the supply side has staged a rapid recovery, with demand now improving as well. Chinese corporates are supported by low leverage and improving interest cover, and offer positive yields with low volatility.  At the same time, equities provide exposure to attractive, structural growth trends such as consumption upgrades, domestic technology and healthcare innovation.  Onshore Chinese equities and bonds come with evident risks around transparency and governance, but well-resourced managers with local expertise are well placed to negotiate this new frontier.  

J.P. Morgan Asset Management has been investing in China A-shares since 2006. This deep, inefficient market which is dominated by retail investors offers active managers with a quality, growth focus significant opportunities to identify companies that benefit from rising consumption and technological innovation. As long-term investors in the bond markets,  our flexible and dynamic allocation across China sovereign and corporates aims to provide an IG-rated portfolio with an attractive yield and duration profile.

Join our webinar on the 30th of September to hear from Luke Richdale, Head of the Emerging Markets and Asia Pacific Equities Specialist team, on how J.P. Morgan Asset Management capitalises on these exciting opportunities.

About the speaker

Luke Richdale is Head of the Emerging Markets and Asia Pacific Equities Specialist team.

He was previously responsible for structured global emerging markets portfolios and the management of EM and Latin American portfolios.

Luke obtained an M.A. in Arabic studies from Cambridge University and is a member of the CFA Society.

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