Pictet AM: Waiting for China

After years of anticipation we might be nearing the entry of China into the widely used JP Morgan GBI-EM GD index.

06.08.2019 | 14:56 Uhr

Almost there

We believe that Chinese bonds are on the verge of entering the most tracked and invested emerging market local currency sovereign debt index. This April saw China included in the Bloomberg Barclays Global Aggregate and Bloomberg Barclays Emerging Markets Local Currency bond indices, but China's bonds still remain excluded from the more widely used JP Morgan GBI-EM GD.

So far the JP Morgan GBI-EM GD index has excluded countries such as India and China due to historical hurdles in accessing these bond markets by foreign investors. GD stands for "global diversified"and this index is designed to be the most easily ‘replicable’ for investors. [Note: the JP Morgan GBI-EM Broad series of EM local currency debt indices has included India and China since their inception in 2005, however very few active investors use this index series.]


Given the size of China's bond market, the indications are for a weighting between 7-10 per cent in the JP Morgan GBI- EM GD. Ten per cent is the maximum permitted for a single country in this index and would put China alongside Poland, Mexico, Indonesia and Brazil

Den gesamten Emerging Market Monitor von Mary-Therese Barton, Head of Emerging Market Debt bei Pictet Asset Management, können Sie sich hier im PDF-Format downloaden.

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