Hong Kong-listed exchange traded funds that invest in China Treasury and government bonds have attracted huge inflows even while the corporate bond market is rocked by an increasing number of defaults.
The interest in China’s government bonds has been spurred by investors seeking returns in a low-interest rate environment, as well as by the rising number of inclusions by major index providers, experts say.
BlackRock’s iShares China Government Bond ETF, which was only listed on the Hong Kong exchange on October 21, had raised Rmb3.25bn ($508.8m) as of November 18. The iShares Short Duration China Policy Bank Bond ETF, listed on the same day, has now raised Rmb265m.