The UK-listed asset management company is offering European investors exposure to the Asian fixed income space.

Aberdeen Asset Management has launched a $60 million Indian bond fund and a $10 million Asian credit fund.

The Aberdeen Global – Indian Bond Fund is a single country strategy and will invest in a portfolio of local currency corporate and quasi-sovereign bonds. The launch reflects the positivity surrounding Indian Prime Minister Modi’s structural reforms and the credibility of Rajan at the Reserve Bank of India, which Aberdeen described as a “potent combination”. The Indian rupee has held up well and inflation brought under control, the company said. The fund does not hedge at the portfolio level, the currency being one element of total return.

The Aberdeen Global – Asian Credit Fund is pan-regional and will comprise a mixed portfolio of mainly investment grade and high yield hard currency issues. Aberdeen said the new fund reflects its belief that Asian debt fundamentals are improving but mis-priced, adding that the risk-return profile of the region's corporate issuers is attractive and the fund should not pose a hurdle to anyone used to investing in more risky regional equities.

“The fundamentals of the Asian credit and, especially, Indian bond, markets are compelling yet investor perceptions have not yet caught up. This is a part of the world where growth and savings are being generated and where policy makers are largely on top of events,” said Aberdeen's head of Asia-Pacific fixed income, Victor Rodriguez. 

“In India, the term structure of interest rates is in decline and that is very positive. Elsewhere, we find attractive real yields backed by decent, sustainable cashflows. When there is so much anxiety globally about inflated asset prices Asian debt would seem to offer good pricing and long-term diversification potential.”

Aberdeen has 18 macro and credit analysts based in Singapore, Bangkok, Kuala Lumpur and Jakarta.

The new funds, which are priced in dollars but offer euro hedged share classes, have been registered for sale in Austria, Belgium, Germany, Italy, Luxembourg, Netherlands, Spain and Switzerland.