FTSE Russell to Include China in Global Bond Index Next Year

China’s roughly $16 trillion bond market is the second largest globally is under-owned by international investors.  10-year Chinese government bonds are yielding around 3% which is “a very high number in the global context.”

FTSE Russell said it will confirm in March the exact date when Chinese government bonds will debut on its index. Before FTSE, Chinese government bonds had been added to the Bloomberg Barclays Global Aggregate Index and the J.P. Morgan Government Bond Index-Emerging Markets.

The inclusion — which will be China’s third entry into a major global bond index — comes at a time when investors are hunting for yield in an environment of ultra-low interest rates. Several investors estimated that at least $100 billion will flow into China after its bonds debut on the FTSE Russell index.

Referece:

CNBC, 2020-09-25, “China is set to join FTSE Russell’s flagship global bond index next year”