BEA Union Investment China High Yield Income Fund ("CHY")

Unleash the Growth Potential and Capture the Income Opportunities of China Bond Market

★★★★

Morningstar Overall Rating 1

Focus on short-dated bonds

More resilient to rate changes with lower duration risk

Select over 100 high-yield bonds

Capture the opportunities in bond market and mitigate investment risk

Average annualized dividend rate at 7.4% since launch in 20162

Investments in the fund are subject to investment risks, including the possible loss of the principal amount invested. For full details and risk factors of the fund, please refer to the explanatory memorandum of the fund. Investors should also read the explanatory memorandum of the fund for detailed information prior to any subscription. The information contained herein is only a brief introduction to the fund. Investors should be aware that the price of units may go down as well as up as the investments of the fund are subject to market fluctuations and to the risks inherent in all investments. Past performance is not indicative of future performance. The information contained in this document is based upon information which BEA Union Investment Management Limited considers reliable and is provided on an “as is” basis. This web page does not constitute an offer, recommendation or solicitation to buy or sell any securities or financial instruments. The fund has been authorized by the Securities and Futures Commission (“SFC”) in Hong Kong. SFC authorization is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors, nor is it an endorsement of its suitability for any particular investor or class of investors. This website has not been reviewed by the SFC in Hong Kong.

1. Source: © 2021 Morningstar. All Rights Reserved. Data as of 31 May 2021. The rating is for A USD (Distributing). Past performance of the Fund: 2020: 5.7%; 2019: 10.4%; 2018: -1.4%; 2017: 7.0%; 2016: 8.4% (since launch till 31 December of the same year); year-to-date (as of 31 May 2021): 0.0%; performance is calculated in A USD (Distributing) on a NAV to NAV basis. Gross income is re-invested. Class A USD (Distributing) was launched on 22 April 2016.

2. Source: BEA Union Investment. The mentioned dividend yield is for A USD (Distributing), and is the sum of the monthly annualized dividend yield for the past 60 months, from 1 June 2016 to 31 May 2021 (60 dividends), divided by 60. Annualized dividend yield = (dividend of the current month x 12) / last month end NAV x 100%. Please refer to dividend notice available on website for dividend composition information and details. Dividend only applies to distributing classes and is not guaranteed. Past dividend record is not indicative of future dividend likely to be achieved. Please note that a positive distribution yield does not imply a positive return. Investors should not make any investment decision solely based on the above information. You should read the relevant offering document (including the key facts statement) of the fund for further details including the risk factors.


China continues its strong recovery and the economic growth for this year is expected to be leading the world. Coupling with the prospective corporate earnings, the performance of high-yield bonds will be supported.

Advantages of Investing in China High-Yield Bonds

1. Shorter terms with more attractive return

China high-yield bonds provide relatively better returns than its global peers. They have shorter terms and therefore are less sensitive to rate changes. It could serve as a defensive investment deployment.


China High-Yield Bonds offer shorter terms with more attractive return

Source: BEA Union Investment, JP Morgan, ICE Data Services, as of 30 June 2021. China HY Corporate is represented by ICE BofA Asian Dollar High Yield Corporate China Issuer Index; Asia HY Corporates by ICE BofA Asian Dollar High Yield Corporate Index; EMEA HY Corporate by ICE BofA High Yield EMEA Emerging Markets Corporate Plus Index; U.S. HY Corporate by ICE BofA U.S. High Yield Index; Latin America HY Corporate by ICE BofA High Yield Latin America Emerging Markets Corporate Plus Index.

2. Default rates are generally lower

China high-yield bonds have lower default rates compared to its counterparts in the western countries. It shows that they could weather through different economic cycles and give rise to better risk-adjusted returns for investors.

3. Positive outlook on China property market

  • Since the introduction of “Three-red-line” policies, many property developers have been actively cutting down debt and leverage, and reduce their participation in land tendering to meet the regulatory requirements. We prefer medium to short-term bonds in the market.
  • Despite the occurrence of a number of financial events, the total revenue of China property developers continues to rise, reflecting that the fundamentals are robust and business prospects are promising.

    • Positive outlook on China property market, Total Revenue at Record High


    Source: BEA Union Investment, Markit as of June 2021.

    4. China high-yield bonds offer better yields

  • Our investment team is highly selective on quality high-yield bonds to seek alpha.
  • Among them, we are optimistic in the industries providing more attractive yields as stated in the chart below:

    • China high-yield bonds offer better yields


    Source: BEA Union Investment, Bloomberg, as of 22 June 2021.
    ** “China Industrials” refers to sectors except Property, Finance and Insurance.

    BEA Union Investment
    China High Yield Income Fund (“CHY”)

    Highly selective on quality China high yield bonds
    to explore long-term potential return

    BEA Union Investment China High Yield Income Fund Highly selective on quality China high yield bonds to explore long-term potential return

    #. The manager may at its discretion make distributions from income and/or capital in respect of the distributing classes of the Fund. Distributions paid out of capital amount to a return or withdrawal of part of the unitholder’s original investment or from any capital gains attributable to that original investment. Such distribution may result in an immediate reduction of the net asset value per unit.

    3. Source: BEA Union Investment. Data as of 31 May 2021. The mentioned dividend yields are for Class A USD (Distributing) and Class A RMB Hedged (Distributing), Annualized dividend yield = (dividend of the current month x 12) / last month end NAV x 100%. Please refer to dividend notice available on website for dividend composition information and details. Dividend only applies to distributing classes and is not guaranteed. Past dividend record is not indicative of future dividend likely to be achieved. Please note that a positive distribution yield does not imply a positive return. Investors should not make any investment decision solely based on the above information. You should read the relevant offering document (including the key facts statement) of the fund for further details including the risk factors.

    4. Source: BEA Union Investment, Morningstar Asia, data as of 30 June 2021. The mentioned annualized volatility rates are for Class A USD (Distributing). Market index refers to ICE BofA Asian Dollar High Yield Corporate China Issuer Index. 3-year annualized volatility rate of the Fund is 9.54% and the market index is 10.02%.

    5. Organizations which have granted awards to this asset class include Asia Asset Management, AsianInvestor, BENCHMARK, Fund Selector Asia, Fundsupermart.com, The Asset and Renitiv Lipper.

    Stable Dividend Record

    Annualized dividend yield at around 7.4% on average over the past 5 years 2

    (Aims to provide monthly dividends, dividends are not guaranteed, and distributions may be paid out of income and/or capital) #
    BEA Union Investment Asian Bond and Currency Fund has a stable dividend history

    Source: BEA Union Investment, data is for A USD (Distributing) from 1 June 2016 to 31 May 2021.

    #. The manager may at its discretion make distributions from income and/or capital in respect of the distributing classes of the Fund. Distributions paid out of capital amount to a return or withdrawal of part of the unitholder’s original investment or from any capital gains attributable to that original investment. Such distribution may result in an immediate reduction of the net asset value per unit.

    2. Source: BEA Union Investment. The mentioned dividend yield is for A USD (Distributing), and is the sum of the monthly annualized dividend yield for the past 60 months, from 1 June 2016 to 31 May 2021 (60 dividends), divided by 60. Annualized dividend yield = (dividend of the current month x 12) / last month end NAV x 100%. Please refer to dividend notice available on website for dividend composition information and details. Dividend only applies to distributing classes and is not guaranteed. Past dividend record is not indicative of future dividend likely to be achieved. Please note that a positive distribution yield does not imply a positive return. Investors should not make any investment decision solely based on the above information. You should read the relevant offering document (including the key facts statement) of the fund for further details including the risk factors.

    Investments in the fund are subject to investment risks, including the possible loss of the principal amount invested. For full details and risk factors of the fund, please refer to the explanatory memorandum of the fund. Investors should also read the explanatory memorandum of the fund for detailed information prior to any subscription. The information contained herein is only a brief introduction to the fund. Investors should be aware that the price of units may go down as well as up as the investments of the fund are subject to market  fluctuations and to the risks inherent in all investments. Past performance is not indicative of future performance. The information contained in this document is based upon information which BEA Union Investment Management Limited considers reliable and is provided on an “as is” basis. This web page does not constitute an offer, recommendation or solicitation to buy or sell any securities or financial instruments. The fund has been authorized by the Securities and Futures Commission (“SFC”) in Hong Kong. SFC authorization is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors, nor is it an endorsement of its suitability for any particular investor or class of investors. This website has not been reviewed by the SFC in Hong Kong.

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