– US Treasuries appear an ominous leading indicator for Chinese Growth names
– Further yield rises probable as ballooning budget deficits and bond issuance exert pressures globally
– China’s National Team seems engaged in battle with global bond markets
Income-oriented Value looks like the beneficiary as markets continue their rotation. In China, the National Team seems to be fighting against the tide as it intervenes to prop up the domestic stock market at the same time China slowly runs off its US Treasury holdings. While China will likely continue to follow a “saw-toothed” growth path over the long-term, we believe that an intrinsic value driven approach to investing in China is the best way to tap this. Learn more about the National Team in our September 2020 research piece below.