Amundi has launched an SFDR Article 8 fund to invest across all Asian fixed income segments, with a focus on both credit and local rates markets.
Diversified across corporates and sovereign issuers, the Asia Income ESG Bond fund will target high income generation with an optimised risk return profiled, employing a robust ESG framework to reduce extra-financial risk while also seeking ESG opportunities.
The fund will be managed by Joevin Teo, head of Asian fixed income and the EM debt team.
“Emerging markets are expected to grow faster than developed markets, with Asia taking the lion’s share of this growth. As we navigate this ongoing market regime shift to a higher rate environment, the increased volatility and uneven repricings offer what we believe to be great investment opportunities for active and flexible asset managers like Amundi,” said Yerlan Syzdykov, head of emerging markets at Amundi.
“With a growing demand for green and social bonds in the region, the appeal for Asian bonds is strong and we are delighted to offer investors in Europe and Asia access to this maturing and increasingly diversified market.”
Aiming to capture a wide range of investment opportunities, the fund is designed to maintain a minimum extra financial analysis coverage of 90%, as well as a minimum allocation to GSS+ Bonds. Furthermore, the investment team will measure and monitor the portfolio’s carbon intensity per euro million of sales and ensure this amount remains below the investment universe average at all times.
The investment team will also monitor and report on additional ESG KPIs covering social and governance themes, with the intent to monitor risks and opportunities at the issuer level and allow Amundi’s teams to engage with issuers on targeted environmental and social themes.
According to Amundi, Asia offers a vast number of investment opportunities. With a marked shift in investment focus from the West to the East, Amundi expects further foreign investment flows across the region and higher yield potential than developed markets corporate bonds.
The top five Asian countries – China, India, South Korea, Indonesia and Thailand – have seen their contribution to world GDP growing over the last two decades, with that share of world GDP increasing to almost 30% today from under 10% in the early 2000s.
