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
Onshore bond funds

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The CCB Principal Dual Income Bond Fund commenced sales in Hong Kong in June 2016. The E Fund product was approved by the Hong Kong regulator in March this year, but sales have not yet begun in the SAR.

Southbound MRF funds − products from mainland asset managers selling in Hong Kong − have seen lackluster demand, as reported earlier.

The CCB Principal fund accounts for roughly 20% of the total sales of all southbound funds, according to Wing-ting Puk, head of investment research and securities services at China Construction Bank Asia.

The fund is managed by CCB Principal Asset Management, a joint venture between Principal Financial Group and China Construction Bank, the second largest bank in the mainland.

The CCB Principal fund and the E Fund product are both categorised as aggressive bond funds under Morningstar’s system in China. They are required to allocate no less than 80% of the fund’s net asset value to fixed-income, and no more than 20% to equities.

Morningstar China has pointed out that in mainland China pure bond funds are rare. They often include equity allocation in order to boost returns, but at the cost of greater volatility.

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