Arthur Lau, Pinebridge Investments
Hong Kong’s Securities and Futures Commission has approved the registration of the PineBridge Asian High Yield Total Return Bond Fund in Hong Kong.
The fund is managed by Arthur Lau, co-head of emerging markets fixed income and head of Asia ex Japan fixed income at Pinebridge Investments, and primarily invests in non-investment-grade issues within the Asia Pacific.
“Recent negative headlines, particularly from the Chinese property sector, have put pressure on the market and its market cap has slid in recent quarters. That said, we believe high-quality issuers with stable fundamentals and no financing pressures offer attractive risk-return profiles. The asset class may continue to offer an additional income source with relatively attractive yields and a shorter duration profile than global fixed income asset classes,” said Lau.
The $14.8m fund is managed by a combined team with more than 20 years track record managing Asian credit strategies and manages over $16bn in assets across Asia ex Japan fixed income funds.
The fund’s investment process integrates ESG screening as a central part of the credit analysis platform, which includes a proprietary bond-scoring methodology based on nine factors, along with comprehensive engagement at the issuer level.
It invests in short- and medium-term non-investment-grade debt securities with current average credit rating of Ba1/Ba2 as of 31 January 2022, issued by entities based in Asia Pacific.
According to the fund factsheet, the fund allocates 27.3% of its assets in the real estate sector, 13.2% in metals and mining sector, and 9.8% in the consumer sector.
A dominating 45.4% of its AUM is invested in China credits, followed by 14.6% in India, and 8.7% in Indonesia. The fund may invest, in aggregate up to 60% of its net asset value in China.
The Pinebridge fund’s reference index, the JPMorgan Asia Credit Index Non-Investment Grade Total Return Index, consists of sovereign, quasi-sovereign, and corporate bonds across 17 geographies and 40 sectors.
The fund is domiciled in Ireland and registered for sale in Singapore last July.