Standard Life Investments launches global emerging opportunities bond fund through new Chinese partnership

Standard Life Investments and Bosera Asset Management have today announced the launch of the Bosera-Standard Life Investments Emerging Opportunities Bond Fund.

The new fund signals the establishment of a strategic relationship between the two companies, with an aim to collaborate in several areas including joint product innovation and investment management cooperation.

A sub-fund of Bosera Investment Funds, the umbrella unit trust established under the laws of Hong Kong, aims to achieve income and capital appreciation through primarily investing in global emerging market (“EM”) debt securities and emerging market currencies, the two firms said.

Edinburgh-based Standard Life Investments said the the development of the fund builds on the “combined strengths of strong emerging market debt investment capability and Bosera’s China fixed income expertise”.

The new Fund will be managed by Kai He, head of fixed income at Bosera International, who is responsible for portfolio allocation in the mainland China and Hong Kong, and for the investment management of the Fund overall.

The sub-manager of the Fund is Richard House, head of emerging markets fixed income at Standard Life Investments, who will manage portfolio allocation in emerging markets globally except mainland China and Hong Kong.

David Peng, head of Asia, Standard Life Investments, said: “The co-creation of the new Fund in Hong Kong signifies the first step in our strategic collaboration with Bosera International, one of the leading Chinese asset managers, which reinforces Standard Life Investments’ global business strategy and strong conviction in the China growth trajectory.

“Bosera International and Standard Life Investments have a proven record of picking successful investment opportunities from within the Chinese bond market and global EM debt respectively. Working together, with our combined international and local market insight, our clients are offered exposure to an expanded global universe of EM opportunities.

“This underpins our commitment to deliver innovative investment solutions designed to meet the evolving needs of investors.”

Kai Shao, executive vice president, Shenzhen headquarters of Bosera International, said: “Capitalizing on the collective strengths of Standard Life Investments’ global investment expertise and Bosera’s China fixed income capability, the partnership aims to strengthen both companies’ ability to deliver for investors. We are delighted to have this excellent opportunity to collaborate with Standard Life Investments on product development, investment management and knowledge exchange. The joint development of the new Fund marks the first initiative of our strategic relationship. This is great news for our clients as they are now provided a new investment choice to tap into the wider, exciting EM fixed income opportunities.”

Kai He, Head of Fixed Income, Bosera International, said: “The Chinese bond markets, both onshore and offshore, have become a more and more important part of the world’s fixed income market, and have been delivering good returns over the past years. We believe it is worth giving China a more fair allocation in the EM space, by which investors will benefit from an enlarged opportunity set. This is what this Fund will bring about.”

Richard House, added: “The fundamentals of emerging markets are stronger than commonly believed. EM sovereign debt offers an attractive opportunity for both long term growth and income, and has produced better risk-adjusted return than developed markets bonds over the long term. Currently, EM sovereign debt offers one of the highest yields among liquid global fixed income asset classes. The Chinese bond market is the third largest in the world. The weight of China in current EM debt indexes does not reflect the global importance of the Chinese bond market and we believe it should form a more significant proportion of a global EM debt portfolio.”