Winnersrationale

“For most fixed income investors in Asia Pacific, 2023 was a year to forget. From rising interest rates to the latest default crisis in China’s high-yield market, the environment was truly unforgiving. PineBridge proved the exception to the rule, however, with its Asia Pacific Investment Grade Bond Fund navigating all of these pitfalls and ultimately delivering an above benchmark return to regional private banking clients,” said Daniel Shane, editor of Asian Private Banker.

“The reasons behind this outperformance include the PineBridge Asia Pacific Bond Fund’s single-minded focus on pure investment-grade, US dollar exposure and its strong boots-on-the-ground investing presence in the region. Led by portfolio managers Omar Slim and Andy Suen, the fund harnesses robustly defined bottom-up and top-down research processes that are both adaptable to market conditions and proven in terms of unearthing alpha-generating opportunities.

“The fund’s commendable, risk-adjusted performance is a testament to PineBridge’s rich heritage in Asia Pacific. Asian Private Banker would like to congratulate everyone at PineBridge on their success in the category of Best Fund Provider – Asia Pacific Bond at the Asset Management Awards for Excellence in 2024.”

Winnersrationale

In a year when Asian credit markets were rocked by a sell-off in Chinese high-yield bonds, the DWS Invest Asian Bonds Fund navigated market volatility to deliver alpha to private banking clients in the region.

The German asset manager’s flagship Asian fixed-income strategy — which has assets under management of just over US$2 billion — focuses on bottom-up credit selection mostly across hard currency bonds. During the assessment period, the fund was boosted by a benchmark-agnostic approach that allowed for a lower exposure to China than some of its peers.

The investment team, led by Asian fixed-income veteran Henry Wong, targets market mispricings that, it says, are often the result of sharp changes in sentiment among the region’s investors.

The portfolio managers managed to obtain a positive contribution from the fund’s China allocation by focusing selectively on a handful of names in high-yield credit (those rated ‘BB’ or above). The strategy benefited from a tactical allocation to Huarong Finance, which became the largest holding in DWS Invest Asian Bonds near the start of 2021. The fund’s managers astutely calculated that the troubled state-backed finance company — whose bonds were heavily sold off by investors — would likely be bailed out by the Chinese government.

As a result, the fund outperformed across several timelines. In November 2021, DWS Invest Asian Bonds had returned 1.1% YTD in dollar terms, beating a 2.1% loss for the J.P. Morgan Asian Credit Index. On a five- and three-year basis, the fund has returned 4.7% and 5.6%, respectively, versus the benchmark’s 3.9% and 5.5%.

The unconstrained approach of DWS Invest Asian Bonds, which allows capital to be deployed across both the investment grade and high-yield spectrum, unearthed other alpha-generating opportunities throughout 2021. Those included the metals and mining sectors in India and Indonesia, which were boosted by a rally in global commodity prices. A focus on shorter duration helped to mitigate the worst market sell-offs triggered by rising US Treasury yields.

DWS Investments is Asian Private Banker’s Best Fund Provider – Asia Pacific Bond for 2022.