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Pictet Asset Management said yesterday that it intends to launch Pictet Asian Bond Income, part of its Hong Kong-domiciled fund product range.
The fund invests across Asian investment-grade and high-yield corporate bonds. The portfolio does not track a specific market benchmark and is driven by bottom-up credit analysis. It takes on a focused yet diversified approach - generating a majority of its core income from investment grade papers, and the rest from quality high yields.
Additionally, the fund allocates at least 60 per cent to investment-grade Asian corporate bonds. It neither invests in bonds with CCC rating nor distressed debt. To avoid concentrated credit risk, the fund’s maximum allocation to each high-yield issuer will not exceed 1 per cent. The fund targets a distribution yield of around 5 per cent at launch.
The Pictet Asian Bond Income initial public offering runs from 4 January to 15 January, and the fund will be launched on 15 January.
“Amid a lower-for-longer rate environment, it is getting increasingly difficult for investors to find real positive return. That is why we are launching an Asian credit strategy that hedges against financial repression by diversifying across high quality, decent-yielding corporate bonds in Asia,” Junjie Watkins, Pictet AM’s CEO for Asia ex Japan, said.
Cary Yeung, head of Greater China Debt and fund manager of Pictet Asian Bond Income said: “Asian credit has gained maturity in terms of breadth and depth over the recent years. Thanks to the region’s economic resilience and healthy investors’ demand, we have witnessed promising growth in the asset class in terms of market size, number of issuers and markets, as well as duration and sector diversification.”