HSBC Global Asset Management makes the case for Asian bonds as it launches three funds into China through the northbound MRF channel.

HSBC Global Asset Management makes the case for Asian bonds as it launches three funds into China through the northbound MRF channel.
Asia bond valuations are appealing, but liquidity needs to return to the market before investors are convinced, according to BEA Union Investments’ fixed income head.
The Tencent-backed firm is yet another manager who is upbeat on the higher-yielding Asian bond market, despite the risks.
Key risks for the asset class have subsided in synch, creating favourable conditions, according to the Legg Mason affiliate firm.
Focusing on higher quality and short-dated bonds will help ease the risk of defaults in Asian USD-denominated bonds, said Pheona Tsang, head of fixed income at BEA Union Investment.
Defaults on Asian high yield corporate bonds may surpass the 2.9% level reported in 2015 due to difficulty in refinancing debt, said Jimond Wong, managing director and senior portfolio manager for Pan-Asia bonds at Manulife Asset Management.
Local currency Asian and emerging market bonds are becoming more attractive as US reform impetus stalls, according to M&G’s Claudia Calich.
The new HSBC Asia High Income Bond Fund is said to have a balanced approach between the firm’s existing Asian bond and high yield strategy, as investors continue chasing for yields.
Fast growing volumes, liquidity and diversity provide more options for regional investors, argues Clifford Lau, head of fixed income for Asia-Pacific at Columbia Threadneedle Investments.
Short duration bonds are key to mitigating volatility in bond holdings, according to Jim Veneau, Axa Investment Managers head of fixed income in Asia.
Part of Mark Allen.