Investments

BEA Union Investment launches Asian bond fund

BEA Union Investment has launched an Asian Strategic Bond Fund.

BEA Union Investment has launched an Asian Strategic Bond Fund. 

The fund, which seeks stable income and capital appreciation, will invest in Asian investment grade/high yield bonds and diversify across Asian countries, sectors and currencies.

It will mainly invest in corporate bonds, which tend to be less sensitive to rate hike cycles. Duration risk will be managed with investments in floating rate notes, short dated bonds and hedging tools such as bond futures.

The fund aims to provide a monthly dividend, has an expected portfolio yield of 4.8% and an average credit rating of BBB- at inception.

The fund will be managed by head of fixed income, Pheona Tsang. 

Elaborating on the investment strategy, the fund house said it believes the pace of rate hikes by the Fed is unlikely to change the accommodative monetary policy of Asia’s central banks. 

Investors are, therefore, expected to continue their search for yield.

The spillover effect of stronger US growth, continuous capital flows into the Asian markets in search of higher yields, the accommodative stance adopted by Asian governments, and the gradual recovery of global commodity prices will contribute to making Asian bonds a highly attractive asset class, according to the asset manager.
The IPO period of the Fund will end on 24 February.
 
The base currency is USD. Currencies available for investors to choose from include USD, HKD, RMB (Hedged) and AUD (Hedged). 

The minimum investment amount is USD2,000 for the USD class, HKD10,000 for the HKD class, or the equivalent of USD2,000 for currency-hedged classes.