Although American investors have focused on domestic markets in the past, investors seeking long-term capital appreciation need to focus on Asia as well.
The rapid rise in income levels and robust population growth in Asian nations (AAXJ) should sustain strong consumption growth.
Total factor productivity measures increases in overall output due to technological advancement without an increase in inputs.
For the last three decades, Asia has posted higher economic growth than any other region of the world.
Asian economies’ rapid urbanization is notable. A shift is expected to unfold in the next few decades, which should boost development and business growth.
The yuan remains a focus of attention of the international community and a key risk for China’s macroeconomic stability in recent years.
Government bond yields in China are higher than its Asian counterparts such as South Korea and Singapore and much higher than major developed markets.
With the onset of reforms, foreign holdings in China’s onshore bond (EMB) (PCY) market is gradually increasing.
Many leading bond index providers are still not including China’s onshore bonds in their benchmark indexes due to various regulatory and operational concerns.
In the third and final phase of bond (EMB) reforms that began after 2015, the substantial activities of the market were open to global investors.
The opening of China’s onshore bond market (EMB) (PCY) was a gradual process that included a number of cautious measures.
In March 2017, Citi’s fixed income indexes decided to include onshore Chinese bonds (EMB) (PCY) in its three government bond indexes.
China’s onshore bond market (EMB), consisting of locally denominated and issued bonds, is larger than the offshore bond market.
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According to Morgan Stanley, US high yield bonds (IGHG) (LQDH) generated a return of 14.4% in 2016.