VAST POTENTIAL IN THE CHINA MARKET
China’s urban population is expected to grow by 276 million between 2011 and 2030. In the process, China’s cities are expected to more than double their demand for energy during the same period, accounting for around 20% of global energy consumption.
Besides energy, water, sanitation and other transport infrastructures are all expected to see huge development and upgrade demand from cities all over China. The urbanisation and modernisation trends will likely create enormous opportunities for related sectors.
2. Consumer discretionary
In 2016, China accounted for more than 40% of global e-commerce transactions (estimated to be larger than France, Germany, Japan, the UK and the US combined). Meanwhile, China had roughly 731 million internet users, which only accounted for 53% of the country’s population.
The Chinese online market is massive and still maturing. Combined with the support from the government, the growing scale of China’s internet user base allows for rapid commercialisation and continuous experimentation of digital technologies. While China is already a global leader in e-commerce and other areas in the digital economy, there is still vast growth potential in the consumer sectors.
3. China's onshore bonds
China has seen its onshore bond (CNY) market size reaching US$9.3 trillion, becoming one of the world’s largest bond markets.
By contrast, the China offshore CNH bond and offshore USD bond markets are relatively small^. With bond index inclusion and Bond Connect, it is hopeful that foreign ownership of onshore bonds will increase – with an estimated US$200 billion of potential inflows #.
Combining the expertise of J.P. Morgan’s equity and fixed income teams
WHY INVEST IN JPMORGAN CHINA INCOME FUND?
1. Various income sources for competitive yield
The Fund is designed to capture the wide income opportunity set in the China space by investing in onshore equities (CNY), offshore equities (HKD), onshore bonds (CNY), offshore CNH bonds and offshore USD bonds.
2. Flexible asset allocation
Given the flexibility of the Fund in its equity and bond exposure, asset allocation of the Fund is mutually determined by our equity and fixed income teams. With a view to accessing competitive yield investments in various markets, the fund managers intend to invest 40-80% in equities* and 20-60% in bonds.
3. Fully capture income potential across sectors
Being able to invest in the China onshore and offshore stock markets means a wider catchment in the dividend universe, where the yield dynamics varies from one sector to another. In the fixed income space, the onshore and offshore markets present a diverse range of opportunities for income investing.
WHO MIGHT CONSIDER INVESTING IN THIS FUND?
Access to China's onshore and offshore equity and bond markets
Active management to achieve dynamic asset allocation
Participation in the potential benefits of a new vision for China income investing
Investors should seek professional advice regarding the suitability of any investment products.