The company said its Asia Total Return Fund will have the flexibility to generate returns through a mixture of investment in local Asian currencies, interest rates and corporate bonds – including both high yield and investment grade credit.
Manulife said the fund, which is available to retail, high net worth and institutional investors in Singapore with immediate effect, will aim to maximise total returns using a combination of capital appreciation and income generation.
Making the case for the Asian bond market, Yu-Ming Wang, head of fixed income, Asia at Manulife said: “Asia is quickly becoming the biggest contributor to world economic growth, with Asian countries collectively tipped to contribute to more than half of the rise in the global economy expected over the next six years.
“The Asian bond market has also grown by more than 10-fold in the last decade, and is now the fourth-largest bond market in the world. The developing countries in Asia also typically enjoy a lower debt ratio than developed countries, as well as huge foreign reserves and more robust fiscal conditions, creating a favourable environment for bond investment in the region.”
He added that Asian bond markets have provided better risk-adjusted returns than global bond and equity markets in the last decade. During the period from December 31 1997 to December 31 2010, the return on Asian bonds per annum was 8%, much higher than that of either the MSCI World Index or the S&P 500 Index, which were 2% and 3% respectively; but the annualized volatility of Asian bonds was only 4%, approximately one-fifth of that of the two equity indexes, said Wang.
