Hedge funds enticed by higher yields in the Far East

By Joe McGrath – Returns from the low end of investment grade debt are doing nothing to excite investors, so hedge funds are looking to higher yields … in China.

Investors seeking a higher yielding income source are flocking to China and the country’s high yield bond market is booming. 

High yield is characterised by loans with a non-investment grade credit rating, which is typically BBB or below from Standard & Poors, or below BAA from Moody’s. According to a Bloomberg report citing AJ Securities data, China had some GBP130 billion (RMB1.1 trillion) of local company bonds with a coupon of 8 per cent or more by the end of May 2019.

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