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China High-Yield Corporates: A Conversation With Portfolio Manager For KCCB ETF

Published Fri, 20 Nov 2020 05:15:24 -0500 on Seeking Alpha

Seeking AlphaFixed IncomeChina High-Yield Corporates: A Conversation With Portfolio Manager For KCCB ETFNov. 20, 2020 5:15 AM ET|| Includes: KCCBby: Brendan AhernBrendan Ahern Portfolio strategy, Long Only, ETF investingKrane Shares.cls-1{fill:#024999;}SummaryKCCB tracks the Solactive USD China Corporate High-Yield Bond Index, which is comprised of USD-denominated China corporate high-yield bonds.
The fund has recovered about 10% from its March low.
As per our observation, there have been no equally extreme cases of a liquidity shock compared to that in March of 2020.
China has been systematically under-allocated to in global portfolios. This could be a mistake. In the current market environment, where yields on a 10-year US Treasury barely touch 0.90% and about one third of issued debt worldwide carries a negative yield, China is a bright spot. With 10-year treasury yields comfortably above 3%,1 it may be worth considering an exposure to China's rate environment. While China investment grade and treasury bonds offer higher yields without moving too far up the risk spectrum, allocating to China high yield may potentially offer a greater reward for doing so compared to the US.
To help our clients gain a better understanding of China's high-yield bond market, we asked Ms. Ting Zhang to break down the market, its risks, and its potential benefits to global investors in a low rate world.
Would you please provide an overview of CCB Securities as a firm and your background as a portfolio manager?
CCB Securities is owned by China Construction Bank (Asia) (CCB), which is headquartered in Beijing but has offices worldwide. Established in 1954, CCB has grown to become the second largest bank in the world by assets. The bank has investment and retail banking divisions in China and around the world.
My name is Ting Zhang and I am a Fixed Income Portfolio Manager at CCB Securities. I have spent the past decade in the investment management industry and have long... Read more