Fund Rationale: BlackRock BGF China Bond Fund

BlackRock BGF China Bond Fund (the “Fund”)
SGD Hedged Retail Class A6 Distribution Shares (ISIN: LU1847653497)
Fund Manager Page
Daily Price & Charts

Endowus have selected the Fund for its broad coverage of onshore and offshore Chinese bond market, its focus on delivering diversification to traditional asset classes, and its proven track record.

Key Information

Fund Objective: Seeks to maximise total return by investing at least 70% of its total assets in fixed income transferable securities denominated in Renminbi or other non-Chinese domestic currencies issued by entities exercising the predominant part of their economic activity in the PRC.

Suitability: Investors who seek to maximise total return, invest in bonds issued by governments and companies in Asia excluding Japan, and are informed investors willing to adopt capital and income risk.


* Total Fund-level Fees include fund management fee of 0.75%.
** Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 11 November 2011
Share Class Inception: 18 July 2018
Benchmark: 1-Year China Household Savings Deposit Rate (Endowus typically use the Bloomberg Barclays Global Aggregate fixed income index as a representative index to benchmark performance over the long term.)

Fund AUM: SGD 11.6bn

Source: MorningStar as of 27 May 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:

Sector Allocation:

Source: MorningStar as of 31 January 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown.

Selection Criteria

Endowus have selected the BlackRock BGF China Bond Fund for its broad coverage of onshore and offshore China bond market, its focus on delivering diversification to traditional asset classes, and its proven track record. We like the fact that the Fund could allocate dynamically to all segments of the China bond market, including onshore RMB, offshore RMB, and USD offshore Chinese bonds. With the shrinking of the offshore RMB bond market and the opening up of the onshore RMB bond market, since 2017, the strategy mainly invests in onshore RMB bonds and USD offshore Chinese bonds. Another unique design of the strategy is that within the onshore RMB markets, the strategy focuses on RMB credit with foreign ownership <1%, which is a segment that is highly diversifying to other major asset classes. 

This approach makes the strategy a one-stop shop for investors who want to gain exposure to the overall Chinese bond market, while preserving the diversification benefit of the Chinese bond market. To illustrate this point, over the past 3 years as of end November 2020, the Fund has  realised a beta of about ~0.06 to global equity, and ~0.3 to global bond and Asian credit. 

The Fund is actively managed with a robust investment process, with fundamental security selection representing the core strategy of the Fund. The Fund is one of the best performing China bond funds, with above average risk. After rebate, the Fund is also attractively priced against its peers.

Updated by Endowus: June 2021

** Disclaimer: Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.
The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.