In an east-west asset management partnership, SLI and Shenzhen-based Bosera International launched their fund today in Hong Kong.
Kai He, head of fixed income for Bosera, is responsible for portfolio allocation in China and Hong Kong, and for the investment management of the fund overall.
The fund aims to invest at least 70% of its net asset value in bonds issued by governments, quasi-government entities or corporations in emerging markets countries and emerging market currencies globally.
“The Chinese bond markets, both onshore and offshore, have become a more and more important part of the world’s fixed income market, and have been delivering good returns over the past years," He said. "We believe it is worth giving China a more fair allocation in the EM space, by which investors will benefit from an enlarged opportunity set. This is what this fund will bring about."
The sub-manager of the fund is Richard House, head of emerging markets fixed income at Standard Life Investments, who will manage portfolio allocation in emerging markets globally except China and Hong Kong.
“The fundamentals of emerging markets are stronger than commonly believed. EM sovereign debt offers an attractive opportunity for both long-term growth and income, and has produced better risk-adjusted return than developed markets bonds over the long term,” House said.
Emerging markets in general have been gaining attention from investors, with Citi Research recently moved EM equities to overweight. Falcon Private Bank believes that sentiment has turned in favour of emerging markets. Old Mutual Global Investors said it was overweight in selective emerging market local currency bonds after a strong Q1 perrformance.