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Even though assets such as equities and gold have been reporting positive growth2 over the past few months, the old saying, “don’t put all your eggs in one basket”, still holds true. In volatile markets, investors can consider diversifying3 into bonds, based on their investment objectives and risk appetite.
The Asian bond market offers a diversified3 suite of opportunities. Among the potential options, we hold a constructive view on the outlook of the Chinese property market. And we believe Chinese property bonds1 offer three compelling factors:
1. An upturn in Chinese economic activities
Caixin/Markit PMI4 data
2. Emerging opportunities in Chinese property bonds
YoY change in monthly sales of China’s top 100 property developers (January – August 2020) 5
3. Potential leaders from industry consolidation1
How are we optimising Chinese property bond opportunities1?
JPMorgan Asian Total Return Bond Fund adopts a flexible approach to optimise investment ideas across a wide range of opportunities. Without benchmark constraints, the Fund invests flexibly in bonds covering different industries, locations and currencies, striving for competitive total returns.
Over 40% of the Fund’s bond holdings covered Chinese issuers, as of end-July 2020, including a number of Chinese property bonds to capture compelling opportunities in the market.
Expanding economic activities and the growing momentum of property sales in China are supportive of bonds issued by Chinese developers. Investors, based on their investment objectives and risk appetite, could consider a diversified3 approach to tap the income potential of an Asian bond portfolio, and help capture attractive total returns.