Posted inHead To Head

HEAD-TO-HEAD: CCB Principal vs E Fund

FSA compares two China onshore funds available for sale in Hong Kong through the Mutual Recognition of Funds (MRF): the CCB Principal Dual Income Bond Fund and the E Fund Stable Return Bond Fund.
by Fund Selector Asia
May 4 - Chinese bond funds sold through MRF

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Foreign holdings in onshore Chinese fixed income are low. Only about 4% of sovereign bonds, or 1.3% of total fixed income products, are held by foreign investors, according to data from People’s Bank of China.

Still, some see attractive opportunities in onshore bonds. “With less capital volatility, short-end Chinese government bonds are extremely attractive,” said Bryan Collins, Fidelity International’s fixed income portfolio manager. “Higher domestic interest rates will also help support the renminbi against the US dollar,” he noted.

Stratton Street Capital’s London-based partner and CIO Andy Seaman said the recent inclusion of Chinese sovereigns into global indices would prompt investors to look at this asset class. He also favours quasi-sovereign bonds in addition to the treasuries, as reported earlier.

Against this backdrop, Lim Yao, analyst at Morningstar China, provides a comparative analysis of two southbound funds authorised for sale under the Mutual Recognition of Funds (MRF) scheme: the CCB Principal Dual Income Bond Fund and the E Fund Stable Return Bond Fund.

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