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Uncommon Yields: How China is a rare bright spot in a world deprived of yield

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Yields have declined across developed markets worldwide. Today, it is impossible for fixed-income investors to achieve the same returns they did fifteen years ago without rethinking their approach. This reality has forced many conservative investors into riskier and riskier asset classes in a race to find new sources of yield. We think China may be a more attractive alternative.

Key Takeaways:

  • China’s bond market may be poised to deliver high yields in a yield-deprived global environment.
  • The offshore and onshore bond markets are now equally accessible to international investors.
  • China’s currency has been trending towards stability, making RMB-denominated cash flows increasingly attractive.
  • Chinese bonds are being rapidly included into dominant global bond benchmarks. With yield and return potential higher than in many other fixed income markets, investors could underperform these benchmarks without a meaningful allocation to China’s bond market.

The KraneShares ETFs are distributed by SEI Investments Distribution Company (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund, or China Construction Bank (CCB), or E Fund. Additional information about SIDCO is available on FINRA’s BrokerCheck.

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