Abrdn announced today the launch of its Asian high yield sustainable bond fund, which aims to provide investors sources of income as economies battle to avoid recession.
“Last year was a tough one for investors into Asia’s high-yield bond market. If anything, it underlined the need for a better approach to risk that can deliver consistently high income while giving investors extra protection from heightened volatility,” said David Hanzl, head of wholesale for Asia Pacific at abrdn.
The fund targets a minimum 70% allocation to Asian high yield credit and a maximum 30% to other investments such as Asian investment grade bonds, local currency and emerging market credits.
It is categorised as Article 8 under the European Commission’s Sustainable Finance Disclosure Regulation.
Supported by the region’s dynamic economic growth, abrdn believes Asia’s high yield corporate bond market is compelling for investors that are seeking long-term returns.
As of the end of 2022, the JP Morgan Asia credit non-investment grade index posted a yield of 7.7%, one of the highest yields available for traditional public market assets, the fund house noted.
“Asian credit offers attractive valuations both against historical norms and compared to other fixed income markets presenting a good opportunity to capture the market’s upside potential,” said Thomas Drissner, head of Asian credit research at abrdn.
“It makes for a compelling investment case and it aligns with the strategic priorities of our global asset management business.”
The fund is managed by abrdn’s 23-person Asia fixed income team, which comprises Asian quantitative and ESG analysts.
It is registered for offering in Singapore for retail investors and professional investors only in Hong Kong.
