Featured Articles

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  Income Partners and Polen Capital Announce Strategic Partnership

  Jun 2023

  “We are thrilled about our collaboration with Polen, a best-in-class US credit investor, and are excited about the global prospects the partnership will bring. This international partnership will allow us to share ideas that will bolster our ability to service clients and their evolving global credit needs,” said Emil Nguy, Chairman, CIO & CEO of Income Partners.
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  IP CIO Letter January 2022

  Jan 2022

  We expect the US 10-year Treasury yield to test 2% in 1Q 2022, two to three rate hikes in 2Q-3Q 2022 barring major market dislocation, and inflation begins to print 4-5% YoY after October 2022 as high base year effect kicks in and the economy cools off. A wild card to watch is whether US consumer spending unexpectedly remains strong. During 2021, US Dollar strengthened against Euro, Yen and almost all other currencies with only one outlier being Chinese RMB. The Chinese RMB is the only currency (and bond market) that has positive real yield and is uncorrelated with the US and G7 markets. We have been advocating an allocation to RMB and Chinese government bonds for the past few years and continue to recommend the same for 2022. On the credit space, The Asian IG bond market will be steady and mainly tracking the overall US treasury market. The excitement and opportunities lie in the Asian high yield space, and China property sector in particular. Based on past 30 years experiences gathered during the Asian Financial Crisis (1997) and the Global Financial Crisis (2008), we found reasons for optimism towards the performance of the Chinese property sector high yield in the next 12 – 18 months.
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  TIME TO INTEGRATE ESG IN ASIAN FIXED INCOME INVESTMENTS

  May 2021

  We believe that integration of Environmental, Social and Governance (ESG) factors in investment decision making is another significant shift in the Asian fixed income landscape. There has been a growing realization that asset owners must be responsible investors. By increasing the importance placed on ESG factors, corporates and other issuers can be influenced and persuaded to operate in more sustainable manners. More importantly, our research has shown that performance and sustainability are not mutually exclusive. On the contrary, we are believers in the long-term value of being able to identify companies with improving ESG characteristics, which will be better equipped to attract capital and avoid potential financial risks down-the-line. A company’s commitment to sustainability (including good corporate governance) will allow it to better avoid defaults, and outperform its peers in the long run.
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  VIEW ON CHINA ONSHORE CREDIT REPRICING

  Nov 2020

  After the unexpected default of a locally AAA-rated provincial level State Owned Enterprise (SOE) Yoncheng Coal, China onshore investors became concerned about the underlying credit quality of the onshore corporate bond issues. Such development has triggered a repricing of onshore credit market, in particular among the weaker local government owned SOEs and LGFVs. We deem such repricing and credit differentiation of onshore credit market a healthy development toward a more transparent and efficient credit market.
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  CHINA BOND MARKET: A STAND-ALONE HAVEN ASSET CLASS

  Jul 2020

  Since our March 2020 writeup titled “The birth of a new haven asset and currency: Chinese RMB bond”, the Chinese onshore bond market has seen accelerated foreign capital inflow. As of June 30, 2020, cumulative foreign holdings of Chinese onshore bond has reached CNY 2.6 trillion, according to State Administration of Foreign Exchange (SAFE). At Income Partners, we have also received substantial inflows into one of the RMB bond funds we manage during July. We believe the recent inflow reflects investors’ recognition that China onshore bond market should be viewed as a stand-alone haven asset class rather than part of emerging market universe- a conviction we have long held.
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  THE BIRTH OF A NEW HAVEN ASSET AND CURRENCY: CHINESE RMB BOND

  Mar 2020

  The coronavirus outbreak has triggered an unprecedented lockdown of global economy and the subsequent meltdown of financial markets has exceeded the severity witnessed during the 2008 global financial crisis. Amid this market turmoil, the Chinese domestic RMB government bond market has weathered the storm well and further proved to be uncorrelated to the broader global bond markets, looming as an alternative safe haven asset that will rival the US Treasury market. This is a landmark moment, both for China and for investors worldwide. The emergence of the Chinese government bond as a credible alternative to the US Treasury is just beginning.