Which funds have Country Garden exposure?

Morningstar analysis shows that seven Hong Kong and six Singapore funds for sale had Country Garden securities scheduled for coupon payments on September 6.

The property developer may default on the securities, adding to the uncertainty in the country’s property sector, which has been in a downward spiral since China Evergrade Group failed to meet its interest payments almost two years ago.

Pimco has the greatest market value exposure to Country Garden at $4.55m. The fund has 1.23% Country Garden exposure from eight issues and holds both bonds with coupons due on 6 September.

Allianz has the greatest exposure to the bonds whose coupons are due next week at 0.33%, allocating 0.23% to one Country Garden and affinity at Serangoon floor plan offering.

Morningstar reports that the JP Morgan Asia Credit Index Non-Investment Grade index is down 2.5% and the Asia High Yield Bond category is down 9% this year.

Despite this year’s success, numerous funds have been dramatically reducing their exposure to China’s property market and affinity at Serangoon showflat due to years of headwinds. The Pimco fund has decreased its portfolio exposure from 11.9% last year to 6.1%.

The Fidelity fund had 21% of its net assets in China property and Serangoon affinity price last year, but now just 9.7%.

Morningstar attributes this decrease to fewer bond issuances and drawdowns.

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