, according to Reuters' interviews with half a dozen firms that advise and manage money for pension funds.
China's debt market is the world's second largest after the United States. Yet while foreigners own a third of the US Treasury market, they hold just 9.7% of China's sovereign debt, according to government data. Investors also cite potential pitfalls such as less market transparency and liquidity, with some Japanese investors protesting China's inclusion into FTSE Russell's World Government Bond Index.
"You have to explain if you invest in China. You don't need to explain if you don't invest. That's how it is for the time being," he said.Pension funds themselves are famously secretive about their investment allocation trends, and more than two dozen contacted by Reuters, mostly European, declined to comment on this.
Insight Investments is looking into setting up a Chinese bond fund on behalf of UK pension funds, Sabrina Jacobs, a fixed-income investment specialist at the $1-trillion asset manager, told Reuters. Insight currently holds around $400 million of Chinese debt within its emerging market and global government bond funds.
Dutch pension funds held 22.4 billion euros in overall investments in China as of the 3rd quarter of 2019, mainly in stocks, with just 300 million euros in bonds, the Netherlands central bank said. That's up from 200 million euros in bonds in 2017.