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Pinebridge launches Asia HY bond fund

The total return product will integrate ESG factors in the investment process.
Arthur Lau, Pinebridge Investments

The US asset manager today announced the launch of the PineBridge Asian High Yield Total Return Bond Fund, which buys non-investment-grade issues within Asia Pacific to capture potential yield and long-term capital growth.

Managed by Arthur Lau, co-head of emerging markets fixed income and head of Asia ex Japan fixed income, the US-dollar denominated fund is supported by portfolio management, research, and trading teams based in Hong Kong.

The combined team has a 20-year track record managing Asian credit strategies, including Asian high yield exposures, and manages around $16bn in assets across Asia ex Japan fixed income strategies.

“In a global lower-for-longer yield environment, the asset class may offer an additional income source with relatively attractive yields and a shorter duration profile than global fixed income asset classes,” said Lau.

“In addition, with valuations of Asian high yield bonds exhibiting significant value on the back of continued improving underlying credit profiles, we believe the asset class will offer a compelling entry point for long-term investments,” he said.

The manager believes that fund may also benefit from strong growth potential for the target assets.

“Even though the high yield asset class has grown 400% in the past decade, Asian high yield bonds still represent only 24% of the Asia Pacific bond market – indicating significant growth potential,” Lau said.

The fund invests in short- and medium-term non-investment-grade debt securities with an average rating of BB-/BB, issued by entities based in the region.

ESG integration

The product’s investment process integrates ESG screening as a central part of the credit analysis platform. This screening process includes a proprietary bond-scoring methodology based on nine factors, along with engagement at the issuer level.

The fund is designed to align with Article 8 of the Sustainable Finance Disclosure Regulation as set out by the European Union.

On a global level, PineBridge is a signatory of the Principles for Responsible Investment, which provides a framework for reporting and assessing ESG factors.

The product’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 12 sectors.

The fund is domiciled in Ireland and registered for sale in Singapore.

Part of the Mark Allen Group.