The Manulife Asia Pacific Investment Grade Bond Fund seeks to maximise returns investing primarily in a diversified portfolio of investment-grade debt securities issued by governments, agencies, supra-nationals and corporate issuers in the Asia Pacific region.
Jill Smith, senior managing director at Manulife Asset Management Singapore, said this was its first fund to be available under the CPF (Central Provident Fund) Investment Scheme.
“We consider Asia an attractive investment destination as the region is expected to show 2014 GDP growth of 6.2%, more than two times higher than developed and other emerging markets. We see many opportunities to generate returns in the region based on the yield premium Asian bonds deliver versus equivalently rated developed-market bonds, generally attractive credit spreads and undervalued Asian currencies.”
The fund will focus on corporate credit in Asian markets as these issuances offer higher-than-global average yield and relatively short duration, which limits interest rate sensitivity, according to Endre Pedersen, managing director of Asian fixed income at Manulife Asset Management,
“While there may be investment options in the Asian market with the potential to deliver higher yields, these securities may also expose the investor to higher levels of risk. The fund’s focus on investment-grade bonds may leave some potential gains on the table during risk-on periods, but we feel it offers a degree of downside resilience in the event of a risk-off scenario,” Pedersen added.
