Where big money investors are putting their fixed income dollars

Finance


Other investors at the conference were notable for their long time horizons.

Liew Tzu Mi, chief investment officer for fixed income at GIC, Singapore’s wealth fund, said that just settling for high valuations and low returns on bonds wasn’t sufficient.

Instead of waiting for companies to bring bond sales to the market, GIC seeks them out, she said on Wednesday.

“We go to companies that we like, we understand the balance sheet, we know that they can withstand a recession and then we go back and say, ‘Hey, how about coming up with a financing solution,'” she said.

In addition, she said GIC was very interested in China’s bond market, noting it was already the world’s third largest despite its extremely low foreign ownership.

“I think we’re still at the infancy, where investors are trying to get comfort around investing in China,” she said. “But for us it’s a huge opportunity because where else can you get, we think, a quality asset in terms of looking at reserves, in terms of the status of the currency at some point in the future.”

She noted that Chinese bonds still had higher yields than many other bond markets. China’s 10-year government bond was yielding around 3.6 percent, while the U.S. 10-year Treasury yield was around 2.2 percent.

“We think at some point these are going to be mainstream, this is going to be in the index, this is going to be in many people’s portfolios,” she said.

GIC, which manages Singapore’s reserves, does not reveal its portfolio size, but on its website it said the amount was “well over $100 billion.”



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