Asian Bond Portfolio (ABP)
Today most Pan-Asian countries are expected to continue growing and corporates run less leveraged balance sheets than their Western peers. Currently, Asian interest rates are 3-4% higher than in developed markets equivalents, which helps generate long term target returns in a prolonged low or zero-growth/rate environment in the Western world. Thus, Asian High Yield offers an attractive return profile, with aggregate yields currently at 8% (as the JACI Non-Investment Grade Corporate Index), with low associated default risk.
The sub-investment manager pursues a fundamental, value-orientated approach through proprietary research and awareness of market technical factors. Income Partners targets undervalued credits based on relative and absolute values with spread tightening targets.
The portfolio will be exposed to Asian focused Emerging Markets currencies to capture the appreciation trend the sub-investment manager expects.