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abrdn launches Indian bond fund for HK retail investors

The managers believe local currency India fixed income can generate income and growth.
India Gate, New Delhi, India

UK-based asset manager abrdn has received authorisation from Hong Kong’s Securities and Futures Commission to sell its Indian Bond Fund to retail investors in Hong Kong.

Managed by abrdn’s Asian fixed income team, the fund invests in Indian rupee denominated bonds which are issued by government or government-related bodies domiciled in India, and/or companies based, or carrying out business activities in India.

It may also have exposure in debt and debt-related securities issued by non-Indian domiciled corporations or governments which are denominated in Indian rupee.

According to the fund’s latest factsheet (30 September 2023), its top 10 holdings are all BBB-rated Indian government bonds, which make up 96.5% of the total portfolio.

“The Indian monetary policy cycle is nearing its peak and inflation is declining. However, bonds are not yet pricing in the potential for policy rate cuts, which we expect to materialize in 2024,” said Kenneth Akintewe, head of Asian sovereign debt at abrdn, in a statement.

The $202.7m Luxembourg-domiciled Sicav I fund was incepted on 1 September 2015 and is already MAS-recognised for distribution to Singapore retail investors.

The fund has generated a 30.98% US dollar gross return since inception, according to FE Fundinfo, but -1.93% during the past three years, with annualised volatility of 5.63%.

The fund’s latest yield-to-maturity 7.25%, its factsheet shows, and monthly distribution share classes are available with the most recent payout yield at 5.01%. Dividends can be paid out of capital.

The annual management charge is 1% according to the factsheet.

“Amid the volatile equity market with sustained inflation concern in major markets, investors are eager to find investment solutions with reliable income and growth potential,” said David Hanzl, head of wholesale distribution Apac at abrdn, said in a statement.

“India’s bond market offers an attractive investment landscape, and we believe the fund will provide investors with the opportunity to benefit from the country’s economic growth and enjoy compelling income yield,” Hanzl added.

Part of the Mark Allen Group.