what it means for Asia junk bond investors


Real estate and related industries account for more than a quarter of China’s economy, according to Moody’s estimates.

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China’s real estate bonds were once key performance drivers for Asia junk bond funds, but the market share from property bonds has fallen as a result of the country’s property debt crisis.

As a result, investors of high-yield bonds in Asia must brace for lower returns, investment analysts tell CNBC.

The market capitalization of those real estate bonds has fallen from an average of over 35% to around 15% within some Asia high-yield funds as the debt crisis drove down prices of property bonds, according to portfolio managers and analysts who spoke to CNBC.  

Property bonds traditionally form the bulk of the Asia high-yield universe. But as their market value fell, their share in the overall Asian junk bond market shrank as well. Consequently, fund managers turned to other kinds of bonds to make up for…

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