Chinese Bonds Bounce Back in Favor as U.K. Fund Giants Look to Buy

(Bloomberg) — Chinese sovereign bonds have become more attractive due to their improving valuations and lower volatility than many global peers, according to two of the largest U.K. money managers.

Abrdn Plc is considering purchasing Chinese debt after selling out three months ago, as rising yields have made the securities more appealing. The relative stability of the bonds and the outperforming yuan are two reasons for investors to buy, according to M&G Investments Plc.

China’s government securities were on track to lose 8.5% this year, based on a Bloomberg total return index, but that’s better than a U.S. Treasuries gauge down 15% and a 26% slide in a U.K. gilt equivalent. Part of their outperformance has been due to the relatively dovish monetary policy of the People’s Bank of China as it seeks to bolster the faltering economy.