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Asian hard currency credit offers attractive yield opportunities

13 February 2018

Please join us for a conference call  to get insight from Carl Wong,  PM of the RAM Tactical Funds II - Asia Bond Total Return Fund


March 13, 2018 at 10:00am CET 

  1. With a size of USD 839 billion at the end of 2017, the growth of Asian USD credit has been substantial over recent years. This asset class is receiving both increased attention and allocation from global asset allocators.The asset class might be able to  cross the USD 1 trillion mark by the end of 2018.

 JACI:JP Morgan Asia Credit Index TR USD

JACI: JP Morgan Asia Credit Index TR USD

 

  1. Asian hard currency bonds offer a good balance between yield and credit/duration risk compared to EUR IG and HY. The so-called “Asian premium”, due to investor perception for the region’s credit risk, present an attractive yield uptick for European investors. Asian IG and HY yield 4.16% and 6.84% respectively (in USD, as of January 31st, 2018).
  1. Since 2009, there has been only one down year for the JP Morgan Asia Credit Index TR USD (-1.4% in 2013). The average return for the past 5 years has been 5.93%. The key reasons behind this solid performance includes:

 

  • Robust demand from local investors
  • Lower default rate
  • JACI composition of 80% IG / 20% HY

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