The risk-return profile of US high-yield fixed income, plus its liquidity, makes it the most attractive asset class for global investors, says strategist James McDonald.
Even traditionally conservative Asian institutions are being drawn to non-investment grade US debt vehicles, notably high-yield bonds and CLOs, says Asia-Pacific head Nick Hoar.
The UK asset manager is attracting Asian institutional clients to new and established strategies, but aims to boost its regional retail AUM and is mulling new products.
Elizabeth Allen has joined from Moody’s Investors Service to boost the credit research effort, in light of growth in the Asian bond market.
While generally positive on the opportunities in Asia’s high-yield credit market, fund managers do have concerns, not least about the risks of CNH bonds.
Dominique Jooris and Julian Trott of Goldman Sachs outline what needs to happen before Asian bond markets are fully developed.
An environment favouring equities means bond managers need to overweight those sectors with equity-like returns, says Brian Weinstein.
Want bonds but worried about interest rate rises? Axa Investment Managers is promoting a new share class in fixed income to generate sales in Asia.
With government bond yields now more likely to rise than fall, investors will need to focus on both yields and credit spreads, says product specialist Mike Story.
Demand will continue to outpace supply in the inflation-linked market, from both traditional and new investor types, says Philippe Descheemaeker of Axa Investment Managers.
Long-term, Western Asset Management is bullish on emerging markets, but currently the firm is overweight developed-market corporates.
Schroders' Richard Brown says the market will continue its growth path.
Ignasius Jonan departs Bahana and returns to Citigroup.