Nordea Asset Management has launched a high yield bond fund focusing on Asian securities issued in US dollars and renminbi.
The fund is denominated in renminbi and is part of Nordea’s Nordea 1 Sicav, which invests in boutique firms.
The Renminbi High Yield Bond Fund is managed by Asian fixed income specialists, Income Partners.
The fund invests in dollar-denominated Asian high yield bonds, with the dollar exposure actively hedged into renminbi, as well as renminbi denominated high yield bonds.
Nordea says both the Asian US dollar high yield and offshore renminbi-denominated bond markets have undergone strong expansion in recent years, while the onshore renminbi-denominated bond market is set to continue opening up to foreign investors over time.
These markets are offering yield levels of 9% to 13%, and accommodative monetary policy in China will continue to support the asset class, Nordea says.
Between 50% and 75% of the Nordea 1 Renminbi High Yield Bond Fund will be allocated to Greater China, with 25% to 50% invested in other parts of Asia. Exposure to the real estate sector will be capped at 40%, with up to 30% in banking and finance.
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