Are China & India the missing ingredients in global bond portfolios?

Diversification prospects

A vast majority of global investors would surely agree that China and India are among the most dynamic and interesting economies in the world, and are set to become increasingly important over the coming decades. But they might be unaware that global bond portfolios often have a zero weighting to these domestic markets, whether investing in global or emerging markets, writes HSBC GAM's Geoff Lunt.

We believe this is set to change. The key reason why the China and India domestic bond markets have been excluded from indices and portfolios is simply that they have not been freely available to foreign investors.  However, the access schemes for these markets have become simpler and more transparent in recent years, to the point that some index providers are considering their inclusion in their most widely followed indices. In a low interest rate world, these markets provide a much needed boost to average yield levels. With the threat of rising interest rates in the US, and negative...