11/04/2013
Allianz GI makes a foray into Asian debt
P { margin-bottom: 0.08in; } The Luxembourg-registered fund Allianz Flexi Asia Bond from Allianz Global Investors (AGI), launched on 3 July 2012, now has reached USD560m in assets, 80% to 90% of which is from Asian investors, including some pension funds, David Tan, CIO for Asia-Pacific fixed income, said on a visit to Paris on 10 April.The specialist says that investing in Asian bonds allows Western investors to diversify, by avoiding the structural problems of Europe. Asia offers solid fundamentals, high returns and potential for appreciation of currencies.The fund is managed in Singapore by Chee Seng Cheng in Singapore, with an absolute return approach, and the objective of delivering returns for investors of 5.5-6%, with ex ante volatility of 5.5% (it has been under 3% so far). Currently, the portfolio has 93 positions, and returns were 8.30% in US dollars as of 2 April, compared with 6.07% for the benchmark index, the HSBC Asian Local Bond Index (ALBI).The management team currently favours the Philippines, China and Korea. It may invest in high-yield bonds, government bonds in local as well as hard currencies, both investment and speculative grade corporate bonds, inflation-linked and convertible securities, but not in loans. Tan states that the portfolio is currenrtly 38% composed of securities denominated in US dollars, and 44% in securities falling into the high yield category.The CIO for Asia-Pacific fixed income says that for the moment, the capacity limit for the highly flexible fund is about USD5bn.
