Making the case for Asian IG credit
Analysis of rapidly developing Asian fixed income markets by Bertram Sarmago, investment director – Asian Fixed Income and Jian Wei Loh, portfolio manager at Nikko Asset Management, proposes that there are increasing opportunities to use exposure to diversify against US credit, particularly by using Asian investment grade credit.
In a note on these developments, they suggest that investors should consider a separate allocation to this sector of the IG universe, to also diversify within the broader Asian corporate debt market. Among the key advantages they see include the lowering of downside volatility for both US investment grade or emerging market debt portfolios, and that despite Asian investment grade offering “moderate” returns this year to date compared to higher beta segments of emerging market debt, it is still offering “robust yield” compared to US investment grade returns.
Click here to see the full research note: Asia High Grade Credit – A More Selective Approach