The Matthews Asia Strategic Income Fund is managed by the same managers and will be run on the same philosophy as the firm’s US-based Asia Strategic Income strategy that was launched three years ago.
Run by Teresa Kong and co-managed by Gerald Hwang, the fund will invest primarily in both local and external currency Asian corporate and sovereign bonds, in a bid to provide a total return over the long term with an emphasis on income, Matthews Asia said. According to Kong, the fund takes a bottom-up approach to securities selection in order to construct a portfolio based on creditworthiness, exposure to the interest rate cycle and the potential for currency appreciation.
According to the Matthews Asia, the significant structural reforms undergone by Asia’s bond markets and their subsequent growth has been “one of the region’s most important economic developments during the last decade”.
Kong added: “Investors’ fixed income portfolios tend to be underinvested in Asia since widely used global debt benchmarks generally allocate to the most indebted countries as opposed to the most creditworthy. Dedicated Asian fixed income allocations enable investors to potentially create a more diversified exposure across interest rate, credit and currency while enhancing the overall risk-return profile of a fixed income portfolio.”
The fund launched on 29 August 2014.