What is Asian Bond Fund – ABF’
The Asian bond Fund-a Fund that invests in government and corporate debt in Asian countries. These funds often exclude Japan, as it is not a developing country, and therefore very different investment landscape than other Asian Nations.
There are two Asian bond funds in dollars, or money, and the Asian bond funds Asian local currency bond funds. For investors worried about the risk of investing in the national currencies of developing countries on the Asian continent, and the dollar Fund may make sense. At the same time, investing in local currency growing emerging economy can provide additional revenue.
The Asian Bond Fund penetration ‘- ABF’
Asian bond funds, as a rule, adjusted by index Asian debt securities, as Morgan Asia credit index or the index of the iboxx index Asian USD bond Index, with J. P. Morgan emerging markets debt indices is the most loyal then asset managers in the industry.
Asian bond funds and emerging markets securities in General, have grown in popularity in the 2000s years, as corporate and public borrowers showed that they learned their lessons from the Asian financial crisis of the 1990-ies, and how bond investors to seek higher yields. Except for the time immediately after the financial crisis of 2008, investors have remained loyal to these types of investment, as low interest rates in developed countries make their higher yields attractive.
Corporations and governments in Asia also benefited from the popularity of Asian bond funds. Traditionally, it was very difficult for governments and companies in emerging markets such as Thailand or Indonesia, to attract the interest of investors in debt that was denominated in local currencies, as buyers of bonds do not want to accept the risks associated with promising economies. It is this dynamics that exacerbated the Asian financial crisis in 1997, as the local businesses that borrowed in dollars could not repay dollar loans with their collapsing local currency.
Many emerging markets Central banks have responded to the accumulation of large currency reserves to prevent a currency crisis, and to ensure that local businesses and financial institutions can buy dollars with local currency at a reasonable price. This helped to ease investor concerns about investing in the national currency funds, and now every year there is much more to issue debt in national currency than the Currency of the debt.
Examples of the Asian bond Fund
Examples include the Asian Bond Fund first state Asian bond Fund, fidelity funds Bond Fund and PIMCO Asia Asia Emerging market Bond Fund.