Bloomberg has launched two new hybrid fixed income indices that include renminbi-denominated China bonds on top of the global indices under the Bloomberg Barclays Benchmark Fixed Income Index family.
Bloomberg is the first index provider to include China bonds in its global indices offering.
The Bloomberg Global Aggregate + China Index combines the Bloomberg Global Aggregate Index with the treasury and policy bank component of the Bloomberg China Aggregate Index; and the Bloomberg Emerging Market Local Currency Government + China Index combines the Bloomberg Emerging Market Local Currency Government Index and treasury component of the Bloomberg China Aggregate Index.
The indices may be used by fixed income investors as benchmarks to measure asset class risk and returns or may form the basis for future investment products such as ETFs.
Bloomberg is the first index provider to include China bonds in its global indices offering. According to the firm, the decision to create the new hybrid China fixed income indices is reflective of increasing accessibility to China’s bond market for international investors and based on Bloomberg’s ongoing global index review and governance process. Renminbi-denominated bonds are not however currently eligible for inclusion in the Bloomberg Global Aggregate Index.
Steve Berkley, global head of Bloomberg’s index business, commented: “We are proud to introduce these China indices, which are the first of their kind. By presenting Chinese securities in the context of the world’s most widely-used independent fixed income benchmarks, we can provide global investors with a new way to analyze China’s bond market, and enable fund managers to proactively assess the impacts of including Chinese securities in their portfolios. Our robust governance process takes into consideration changing market developments and investor opinion, and we will continue to evaluate China’s inclusion in our indices as interest in China’s interbank bond market increases.”
The Bloomberg Global Aggregate + China Index currently includes 18,386 member securities with a market value of $48.5 trillion, among which there are 151 China Treasury bonds and 251 bonds issued by Chinese Policy Banks. The market weight of the Chinese yuan is 5.31%, ranking fourth after the US dollar, euro and Japanese yen.
The Bloomberg Emerging Markets Local Currency Government + China Index is a market capitalization-weighted index. The index has 616 member securities including 151 China Treasury bonds. China bonds weigh 39.1% in the index.