HEAD-TO-HEAD: Allianz vs Fidelity

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Pictured above: Luke Ng, FE Advisory Asia

The universe of Asia high yield bond funds available in Hong Kong and/or Singapore is relatively small. It consists of only nine funds and many of them are relatively new. Five of them were just launched after 2013, according to FE data.

The oldest is the Fidelity Asian High Yield Bond Fund, which has assets of around $4.3bn.

The HSBC Asian High Yield Bond Fund, launched in 2011, is the second biggest fund in the category, with around $972.6m of AUM.

The category has seen a substantial demand from investors. The Allianz Dynamic Asian High Yield Bond Fund, which just launched its fund two years ago, quickly gathered assets. Its AUM now is around $950m.

The market for Asia high yield bond funds continues to grow, reflecting the growth of the issuance of Asian high yield bonds, according to Luke Ng, senior vice president of research at FE Advisory Asia.

“You have now better liquidity, and the issuance this year has surpassed that of last year,” he said.

As of the end of September, the volume of bonds issued in Asia including Japan in 2017 totalled $221bn, which was up 61% from the same period in 2016, according to data from Dealogic. The volume of high yield bonds issued during the same period totalled $48bn, a threefold increase over the same period last year.

Ng noted that the majority of these issuances come from Chinese companies, resulting in a relatively high weighting in major Asian high yield indices.

Against this backdrop, FSA compares two Asia high yield fixed income funds: the Allianz Dynamic Asian High Yield Bond Fund and the Fidelity Asian High Yield Bond Fund.

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