BNP Paribas Investment Partners (BNPP IP) has announced the launch of two Asian fixed income funds : Flexi I Bond Asia Investment Grade and Flexi I Bond Asia Investment Grade Plus.
These are sub-funds of the BNP Paribas Flexi I Ucits IV Luxembourg Sicav. They target European insurance company investors that seek higher yield in the current low rate environment.
The strategy aims to benefit from the Asian economic and financial development through an active fundamental approach seeking to unlock potential opportunities in the region’s fixed income markets.
Factors considered in the approach include macroeconomic analysis, valuation factors and sentiment indicators. A proprietary credit scoring model is also used by BNPP IP.
The funds invest mainly in Asia ex-Japan investment grade fixed income securities denominated in US dollar and hedged in euro.
Adeline Ng (pictured), head of Asian Fixed Income at BNPP IP, said : “The growth of the Asian fixed income market has coincided with investors extending their universe in the hunt for yield within the ongoing low interest rate environment, as they have recognised its increasing credit quality, very low default rates and improved liquidity.
“All major Asian countries now have an investment grade rating from one or more of the three major ratings agencies. This is a significant transition compared to 10 years ago, and the region’s fundamentals are now the strongest in the emerging markets universe.”
BNPP IP has around $30bn of assets under management and advisory in Asian fixed income as at 30 September 2015.