As I mentioned in the article before, the current urban investment dollar bonds have come to the first allocation window, especially as the US inflation data falls, the economic data cools, and the Fed's interest rate cut expectations increase.
As we all know, after the implementation of the debt policy, the yield of domestic urban investment bonds has been compressed to a historical low, while the yield of urban investment dollar bonds is still high, and urban investment dollar bonds are as safe as domestic standard bonds, and there has been no default case so far.
Speaking of which, we have to talk about the three major sectors of Chinese dollar bonds. There are three main forces of Chinese-funded US dollar bonds: financial bonds of banks, real estate dollar bonds of real estate companies, and urban investment dollar bonds of urban investment platforms, among which financial bonds have low returns and high credit risks of real estate dollar bonds, while urban investment dollar bonds take into account both safety and yield, so they are a very good investment direction.
Individual investors can participate in the investment of Chinese dollar bonds through a variety of channels, including purchasing QDII products issued by **asset management companies, ** companies and other institutions. In addition, individual investors can also consider investing in offshore public offerings**, which are managed by a team of professionals dedicated to investing in the Chinese dollar bond market. If individual investors meet the criteria of a professional investor, they can also choose to open an account with a licensed broker in Hong Kong to invest directly in Chinese dollar bonds.
At present, domestic investors mainly invest in urban investment US dollar bonds in three ways: QDII, QDLP and cross-border TRS.
qdiiQDII is an overseas wealth management business that allows approved qualified domestic investors to invest in overseas markets and products using their own funds or raising domestic funds. The quota for overseas investment through QDII is subject to the unified approval of the State Administration of Foreign Exchange, which implements balance management of the investment quota, and the QDII business of each institution is also subject to the management of the competent regulatory authority of the institution.
For domestic investors, if they want to allocate overseas assets through QDII, they can invest in products such as QDII**, QDII Wealth Management, QDII Asset Management Plan, QDII Trust and QDII Insurance Asset Management Plan. At present, the QDII quota is mainly in the hands of public offerings**, cross-border banks (domestic cross-border or foreign banks), a small number of securities firms, insurance, and trusts; There are also some private placements that have subscription quotas, and they can also be subscribed through the FOF model.
qdlpQDLP is a qualified domestic limited partner, which means that after passing the qualification approval and obtaining the quota, the pilot ** management enterprise can raise funds from domestic qualified investors and set up a pilot ** to invest in the overseas primary and secondary markets. At present, QDLP has not been promoted nationwide, but has been implemented in various local pilots, as early as 2012 in Shanghai, and then in Beijing, Tianjin, Shenzhen, Qingdao, Chongqing, Hainan, Jiangsu, Guangdong, Ningbo and other places, and supervised by local financial regulatory bureaus.
QDLP also requires the approval of the investment quota by the foreign exchange bureau. At present, QDLP is mainly in the hands of mainland institutions of foreign investment institutions, mainly to facilitate foreign investment institutions to raise funds to participate in overseas markets. The QDLP channel is relatively secure, even in FOF mode, and this security architecture is either one-to-one or overseas sub-account mode.
Cross-border TRSTRS refers to the exchange of cash flow between the income of specific assets and fixed interest rates agreed between the company and eligible customers within a certain period of time in the future, and the channels for income swap are mainly securities companies and foreign banks. It can be simply understood that investors can participate in the investment of US dollar bonds in the Hong Kong market on the mainland, but they need to pay a fixed interest. Under this investment method, the funds do not need to cross borders, only the coupon and profit and loss need to be exchanged at the end of the period, and the settlement currency is RMB, so its quota is not limited by the regulatory authority. In addition, TRS does not have a clear restriction on a single fund or fundraising account, and the investment scope is wider and the investment period is more flexible.
At present, the TRS quota is mainly in the hands of cross-border banks and domestic ** companies, and the domestic department and the overseas department are linked, but there are also many brokerages in the field of studying to join the cross-border TRS. It will play an increasingly important role in the path of investing in foreign bonds in the future.
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