Investor interest in Asia’s high-yield bond market has remained strong despite challenges faced by the Chinese economy.
Tabula Investment Management, a fixed income exchange-traded fund (ETF) provider based in London, says its Asia ex-Japan High Yield Corporate USD Bond ESG UCITS ETF saw about US$75 million in new inflows in May alone. The ETF, which only launched in September last year, now has over US$250 million in assets under management.
Last week the firm added a GBP-hedged distributing share class of the fund to the London Stock Exchange. The Tabula Haitong Asia ex-Japan High Yield Corp USD Bond ESG UCITS ETF, developed in partnership with Haitong International Asset Management, aims to enhance both liquidity and ESG profile, while maintaining an attractive yield (currently 17%), a duration of just 2.7 years, and is classified as Article 8 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
“The opportunities offered by Asia high yield to investors are clear, but there have been some recent well documented challenges in the Chinese market,” says Tabula chief executive officer Michael John Lytle. “However, flows into our Asian High Yield ETF clearly show that investors are much more confident about this market now. This is being fuelled by an easing of concerns around coronavirus in China, a loosening of Chinese fiscal policies, and a growing package of economic stimulus in the country.”