your canvas for
growth and income
Asia’s growth is outpacing that of Europe and the US.
Even as the global growth rate slows, Asia remains a bright spot for investors.
Asia’s growth engine.
China’s growth may be slowing but in the long term, it is on track to become the world’s largest economy and a superpower.
China’s domestic market ambitions.
A strong domestic market is one of China’s top priorities. With its strategic ‘Made in China 2025’ plan, China is moving away from being the ‘factory of the world’ and an export-led economy to a domestic consumption growth model based on higher value products and services.
Asian Fixed Income –
a canvas of opportunities
Pick the right
asset class –
Asia Fixed Income
Asian bonds are enjoying a resurgence due to the better yields and better valuation levels as compared to a year ago.
With interest rates at record low levels in the developed countries, Asian Fixed Income stands out with its attractive yields.
Asia needs to spend USD1.7 trillion till 2030* to maintain its growth. Add to this the myriad cross-border connectivity projects that will further spur its growth potential.
*Source: Asian Development Bank publication “Meeting Asia’s Needs”, February 2017
Over 40%* of the world's e-commerce transactions currently take place in China, up from only 1% about a decade ago. The Chinese are also travelling more. In 2017, 5 billion trips** were made within China, triple the level 10 years ago.
*Source: World Economic Forum, 2018
**Source: Goldman Sachs, CNTA, as of 31 December 2017
What is powering
Source: Bloomberg, J.P. Morgan, Allianz Global Investors, as at 31 January 2019. Based on J.P. Morgan Asia Credit Index.
#Default regions in Asia compared with other regions (EM Europe, Latin America and Middle East & Africa).
Source: J.P. Morgan, as at 4 January 2019.
After the price correction in 2018, Asian bonds, particularly high yield, are now trading at better valuations.
Yield enhancement benefits
The yield-to-maturity (YTM) for Asian investment grade bonds is at a level that is near 5 year highs. The YTM for Asian high yield bonds is also at the high end range over the past 5 years.
With comparatively higher yields, coupled with a relatively lower default rate# in the high yield space, investors can potentially be adequately compensated for the risk taken.
Source: Bloomberg, JPM, Allianz Global Investors, as at 31 January 2019
*Based on J.P. Morgan Asia Credit Index.
HY refers to high yield. IG refers to investment grade.
How to benefit from Asia’s growth story
Allianz Dynamic Asian High Yield Bond
High conviction portfolio based on fundamental bottom-up selection.
Allianz Flexi Asia Bond
Agile allocation across bond markets.
Active is: Drawing on Asia’s rich potential
Active management becomes increasingly important as we enter a more volatile environment. Together with our proven expertise in Asian Fixed Income we can help you identify Asia’s shining stars.
Over the past three years, our team has won a string of awards that recognise the performance of the strategies under management.
View our awards
Find out how Allianz Global Investors can help you meet your investment goals
All data are sourced from Bloomberg and Allianz Global Investors and as of 31 January 2019 unless otherwise stated.