risks.

The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Credit risk, Liquidity risk and Emerging market risk.

glossary.

Asia Investment Grade

Aiming to generate alpha in investment-grade Asian credit

 

Asian credit denominated in USD hard currency is now a sizeable opportunity for global investors. Allocations to Asian investment grade (IG) are rising thanks to its attractive diversification qualities based on higher yields, shorter duration and different underlying exposures compared to the global credit market.

1 Source: Bloomberg indices, JP Morgan indices, Lombard Odier. As at March 2022.

diversity and depth.

The Asian investment-grade credit market offers diversity and depth across a broad range of countries and sectors with ample trading liquidity. The wider Asia-Pacific universe includes high-quality large-cap companies from Japan and Australia. Over the past decade:

  • The median deal size has increased from USD 30 million in 2011 to USD 500 mn
  • Approximately 71% of deals issued in the Asia-Pacific USD-denominated market were greater than USD 500 mn in size
  • Large jumbo issuers have also entered the market, with issue sizes more than USD 3 billion
  • Large, non-benchmark IG issuances have been tapped in the infrastructure and commodity sectors

Source: LOIM; Bloomberg, 31 May 2023. For illustrative purposes only.

1 Source: Moody’s, JP Morgan, October 2018. There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred.

dynamic search for value.

Asian economies have the ingredients for an attractive credit outlook: economic growth, improving fiscal balances and sustainable debt levels.

The Asia Investment Grade strategy is built on three pillars.

For illustrative purposes only. 

our strategy.

The Asia Investment Grade strategy focuses on Asia-Pacific issuers in hard currency. The team employs a high-conviction approach, seeking to generate both income and capital gains by investing in what the team considers to be the best opportunities in the region.

The benchmark-aware, unconstrained investment process is managed dynamically across the debt capital structure (senior, subordinated) and debt classes (sovereigns, corporates, financials). The strategy only actively invests in investment grade securities, and to provide greater flexibility and opportunity, it has 30% allowable limits for non-Asian issuers.

With a focus on fundamentals, the team carefully assesses the quality and risks of each investment while considering the top-down positioning and overall portfolio risk limits.

philosophy.

We believe a high-conviction, active-management approach is best suited to the Asian credit markets where inefficiencies and dispersions can be ample over time, and where risks and opportunities are fluid. We select investments and build diversified portfolios based on a value-bias which, we believe, will allow us to capture long-term outperformance on our long-only total return strategies. Our relentless, value-oriented, fundamental top-down and bottom-up research further generates long-term advantages. We are benchmark-aware but not benchmark-driven.

investment team.

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Dhiraj Bajaj
Portfolio Manager & Head of Fixed Income Asia

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Nivedita Sunil 
Portfolio Manager

 

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Poh Xiongwei
Senior Credit Research Analyst

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Kenneth Kwan
Senior Credit Research Analyst

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Janvi Sanghvi
Credit Research Analyst 

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Benedict Liew
Fixed Income Product Specialist

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more about our funds.

LO Funds - Asia Investment Grade Bond

Asset ClassFixed Income
StrategyRegional Fixed Income
CategoryEmerging markets
Share class name ISIN CurrencyDateNAV
Past performance is not a guarantee of future results. If the funds are denominated in a currency other than that in which the majority of the investor's assets are held, the investor should be aware that changes in rates of exchange may affect the value of the funds' underlying assets. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

insights.

Asian credit: a growing opportunity
fixed income Asset Management
fixed income Asset Management fixed income Asia Investment grade Asia value bonds DC DB Banks Investment strategies Official institutions Wholesale Third party asset managers Consultants Geronne Independants Insurance Institutional Endowments Fund of funds

Asian credit: a growing opportunity

We see Asian credit continuing to expand as an asset class and outline the key indices and benchmarks in this growing opportunity set.

Asian credit: repositioning in EM debt
fixed income Asset Management
fixed income Asset Management fixed income Asia Investment grade Asia value bonds DC DB Banks Investment strategies Official institutions Wholesale Third party asset managers Consultants Geronne Independants Insurance Institutional Endowments Fund of funds

Asian credit: repositioning in EM debt

Why should investors become more selective within emerging market debt and position Asia-Pacific at the core of allocations?

Asian credit: a source of efficiency in credit allocation
fixed income Asset Management
fixed income Asset Management fixed income Asia Investment grade Asia value bonds DC DB Banks Investment strategies Official institutions Wholesale Third party asset managers Consultants Geronne Independants Insurance Institutional Endowments Fund of funds

Asian credit: a source of efficiency in credit allocation

How could Asian investment grade credit denominated in dollars be used to make a core credit allocation more efficient?

Asian credit: 3 key diversification benefits
fixed income Asset Management
fixed income Asset Management fixed income Asia Investment grade Asia value bonds DC DB Banks Investment strategies Official institutions Wholesale Third party asset managers Consultants Geronne Independants Insurance Institutional Endowments Fund of funds

Asian credit: 3 key diversification benefits

What 3 key diversification benefits does Asian investment-grade credit offer compared to the traditional global aggregate universe?

Asian credit: a structurally growing asset class
fixed income Asset Management
fixed income Asset Management fixed income Asia Investment grade Asia value bonds DC DB Banks Investment strategies Official institutions Wholesale Third party asset managers Consultants Geronne Independants Insurance Institutional Endowments Fund of funds

Asian credit: a structurally growing asset class

Asian credit denominated in US dollars offers a series of advantages for global investors in investment-grade fixed income.

important information.

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