The Manulife China High Yield Bond Fund invests in a diversified portfolio of China high-yield bonds and money market securities seeking asset stability and long-term capital appreciation.

The Manager has substantial investment, risk management, and credit analysis resources and capability within the Manulife Group. This strategy seeks to generate superior returns from investing in the under-researched China bond universe. A key strategy is to seek risk reduction through active diversification, and the Fund portfolio has numbered between 75-89 securities in the past three years.

In keeping with the Manulife Group practice, the fund has thorough ESG processes and advocacy. Its credit analyst team works closely with dedicated ESG analysts to review material ESG factors on each issuer. The reviews are cross-checked across Manulife's proprietary Asian fixed-income ESG internal risk rating framework for consistency.

According to a cited example, the fund detailed how their ESG analysis on palm oil production in Asia is a controversial ESG issue because of the association with many adverse environmental and social effects, which could result in credit risks to companies in the palm oil sector. Because of market access risks and operational risks where plantations' sustainability cannot be maintained, Manulife has excluded the investment consideration industry.

The fund has delivered moderate outperformance with net returns of more than 0-50 basis points above the benchmark on a 3Y, 5Y, 7Y, and 10Y period. The oldest US dollar-denominated bond class (USD A) established in 2011 has a cumulative return of 41.56% since inception, with an IRR of 3.795%. The newer share class (USD B), established in 2013, has a cumulative return of 41.60% and an IRR of 4.694%. After a management fee of 1.25% and 0.25% custodian fee, the annual net return of USD A debt is 2.259%, the annual net return of USD B debt is 3.194%, the corresponding risk-reward grade is RR4, with an annualized standard deviation of 14.19%, which demonstrates a remarkable team run by the Manager.

This fund has been reviewed by three industry veterans of the Benchmark judging committee.