Fixed Income

A move away from US assets is accelerating as investors seek refuge in European bank debt, a market offering stability from ECB policy and insulation from tariffs and geopolitical ructions.

Risk-based capital frameworks across Asia are fundamentally changing how insurance investment teams approach asset allocation, with interest rate challenges and capital efficiency becoming central to investment strategy development.

Policy credibility and deepening capital markets are transforming Asian fixed income from a tactical play into a strategic allocation, even as managers debate whether the region can compete on yield with other emerging markets.

With US monetary policy entering a new phase, Asian credit markets are attracting attention thanks to cleaner corporate balance sheets and an attractive yield profile.

Asian emerging market local bonds offer lower yields than Latin American or Eastern European peers, but the region's stability, reforms and shock resilience are boosting its appeal for global investors.

With the long-standing dominance of US funds questioned due to outflows, Asian markets including South Korea, China, and Taiwan narrowed the performance gap and attracted new interest on the back of strong rebounds.

High‑yielding carry trades and surplus‑backed currencies are drawing different institutional investors to Asia, as managers weigh how to balance cyclical opportunities with long‑term stability.

As bond–equity correlations shift unevenly across Asia, investors are rethinking how to structure portfolios.

With yields elevated, currencies stabilising and liquidity improving, Asian local currency bonds are drawing greater attention as investors diversify away from dollar assets.

After years of elevated bond–equity correlations, signs of decoupling are emerging in Asia. But the pattern is uneven, with inflation expectations, central bank credibility and market structures shaping whether bonds can reliably diversify portfolios again.

Despite rapid growth and rising institutional interest, Asia’s ETF industry remains fragmented and constrained by regulatory and retail barriers — leaving it far behind the US in scale and accessibility.

Despite fiscal strains in developed markets, Asian investors continue to favour sovereign debt. Managers say allocations remain stable, though yield dynamics and sector fundamentals show where flows could shift if preferences change.