Vanguard joins EM chorus, sees strength in bonds
The firm sees improvement in the risk-reward balance for sovereign and investment grade corporate bonds in emerging markets.
The firm sees improvement in the risk-reward balance for sovereign and investment grade corporate bonds in emerging markets.
The current credit cycle may be reaching a turning point and, notwithstanding fears that US Federal Reserve rate hikes look almost certain, now is the time to buy high yield credit and particularly from Asian issuers, says Teresa Kong, portfolio manager at Matthews Asia.
Corporate bond issuers in Singapore will find it easier and cheaper to tap into the retail market after the country’s monetary authority (MAS) introduced two new regulations that will open up corporate bond offerings to retail investors.
BlackRock has launched a sterling strategic bond fund for fund managers Simon Blundell and Ben Edwards.
BlackRock expects the fixed income exchange traded products space to reach $2trn (£1.4trn, €1.75trn) by 2025, said Brett Olson, head of iShares fixed income EMEA.
Legal & General Investment Management (LGIM) and Nikko Asset Management announced on Wednesday the signing of a business cooperation agreement that will expand LGIM’s presence in Japan’s fixed income market and further Nikko’s aims in Europe.
Amid the political turmoil, Brazil has done well for fixed income investors, but questions remain around further volatility.
Around $39bn fled funds in Asia during the first quarter of this year, and one asset class took an enormous hit, according to data from Strategic Insight.
Returning to the international market after a 15-year hiatus, Argentina raised $16.5bn in an oversubscribed debt offering last month, the largest ever for an emerging market. But, according to Scott Fleming, manager of the Kames Emerging Market Bond Fund, the risk was not appropriately priced.
China’s central bank has relaxed the rules for mainland corporations looking to issue bonds offshore, according to the People’s Bank of China.
Saudi Arabia is poised to tap the international loan market for the first time to raise $10bn (£7bn, €8.8bn) to help fill a huge budget deficit caused by the dramatic fall in oil prices, and may also issue a debut global bond, according to bankers cited in several media reports.
Returns from mainland funds might look attractive to overseas investors, but be aware of the differences in product design and investment style, said Morningstar China director of manager research, Rachel Wang.