Aberdeen launches two Asian fixed income funds

The Aberdeen Global – Indian Bond Fund is a single country strategy and will invest in a portfolio of local currency corporate and quasi-sovereign bonds.

The Aberdeen Global – Asian Credit Fund is pan-regional and will comprise a blended portfolio of mainly investment grade plus high yield hard currency issues.

A statement from the wealth manager said the timing of the launches reflects Aberdeen’s belief that Asian debt fundamentals are “improving but mis-priced”.

Aberdeen said it is aiming its two funds at relatively sophisticated investors, although it stresses that the Asian Credit Fund should not pose a hurdle to anyone used to investing in more risky regional equities.

As a sign of confidence, the company is seeding the Indian Bond Fund from internal allocations so the fund will have around US$60m at inception, while the Asian Credit Fund will start at US$10m.

The Funds have initially been registered for sale in the following countries Austria, Belgium, Germany, Italy, Luxembourg, Netherlands, Spain and Switzerland. Both funds are priced in dollars but offer euro hedged share classes. The Indian Bond Fund does not hedge at the portfolio level, the currency being one element of total return.

Victor Rodriguez, head of Asia Pacific fixed income at Aberdeen, said: “The fundamentals of the Asian credit and, especially, Indian bond, markets are compelling yet investor perceptions have not yet caught up. This is a part of the world where growth and savings are being generated and where policy makers are largely on top of events. In India the term structure of interest rates is in decline and that is very positive. Elsewhere, we find attractive real yields backed by decent, sustainable cashflows. When there is so much anxiety globally about inflated asset prices Asian debt would seem to offer good pricing and long-term diversification potential.”