China to be added to FTSE global bond benchmark in 2021

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FTSE Russell will add Chinese government bonds to its flagship World Government Bond Index (WGBI) starting in 2021 and pending confirmation in March, the index provider said on Thursday.

Chinese government bonds, a 1.5 trillion U.S. dollars market, are already a part of the JPMorgan and Bloomberg Barclays index suites. But the FTSE WGBI has a far larger passive band of investors following it.

Goldman Sachs estimates there is 2.5 trillion U.S. dollars of global cash following the WGBI, and China's inclusion could drive 140 billion U.S. dollars into the mainland bonds over the inclusion period.

Malaysian bonds will remain on the watchlist, FTSE Russell said.

Source(s): Reuters