Okay, so I spent some time looking into these dim sum bond ETFs a while back. Here’s how that went down.
Getting Started
It all started because I kept hearing the term “dim sum bonds” thrown around. Sounded kinda fancy, right? Like something exotic. I figured, maybe this is some hidden gem for investing, something different from the usual stuff. My portfolio felt a bit boring, so I thought, why not poke around? I wanted to see if getting exposure through an ETF made sense, ’cause buying individual foreign bonds? Nah, too much work for me.
The Digging Process
First thing I did was just plain searching online. Typed in “dim sum bond ETF”. Simple enough. Got a few hits, mostly articles explaining what they are – basically, bonds issued outside mainland China but paid in Chinese Yuan (the offshore version, CNH, they call it). Okay, interesting concept. Holding Yuan debt without dealing directly with mainland markets.
Then I tried finding actual ETFs you could buy. I logged into my brokerage account, used their screener tool. Looked on a couple of financial data websites too. It wasn’t like finding an S&P 500 ETF, that’s for sure. There weren’t that many options readily available, at least not for me easily through my usual platform.
I managed to identify one or two specific tickers. So, the next step was looking at their details. You know, the usual stuff:
- What bonds are actually inside? Had to check their holdings. Mostly Chinese government or big company debt, seemed like.
- What’s the cost? Looked up the expense ratios. They weren’t super cheap, definitely more than your basic bond index fund.
- How much trading happens? Checked the volume. Seemed kinda low on some days, which always makes me a bit nervous about getting in and out easily without messing up the price.
- Currency stuff. This was a big one. It’s all in offshore Yuan (CNH). So you’re not just betting on the bonds, you’re also betting on the CNH vs. your home currency. Adds another layer of things to worry about.
Hitting a Wall (Sort Of)
I pulled up the charts, looked at the performance history. Honestly? It didn’t blow me away. The returns looked kinda meh, especially when you factor in the currency fluctuations and the fees. I tried comparing it to some other bond ETFs I already knew, like plain US Treasury ones or even some emerging market dollar bond funds.
It started to feel like a lot of hassle for potentially not much gain. The whole point was finding something interesting, maybe with a good return profile. But the complexity of the currency risk, combined with the costs and the sort of lukewarm performance I was seeing… it just didn’t seem worth it for me.
My Final Take
So, after spending a few afternoons reading up, checking my broker, and looking at the numbers, I decided to pass. I just closed the browser tabs and moved on. Didn’t buy any shares, didn’t add it to my watchlist. It felt like one of those things that sounds more interesting in theory than it works out in practice for a regular guy investor like me. Too many moving parts – bond risk, Yuan risk, liquidity questions, fees. Maybe for big institutions or someone really focused on CNH exposure it makes sense, but for my goals? Nah. I just stuck with simpler stuff. Sometimes boring is better, you know?