Concerns remain on whether interest rate hikes by the Fed will be able to slow economic activity and tame inflation — or push the US economy into recession, triggering major uncertainties for Asian capital markets.
Arthur Lau, head of Asia ex-Japan fixed income, and Emily Lam, client portfolio manager, at PineBridge Investments, highlight the continued appeal of Asia investment grade (IG) as well as high yield (HY) bonds for their relatively stable and attractive source of yield and diversification.
High yield exposure, emerging markets debt and short duration strategies might help investors weather uncertainty over the coming months, says State Street Global Advisors SPDR, based on analysis of data covering $12 trillion in bond holdings and prices from millions of items.
The appetite of institutional investors for green, social, and sustainable bonds that bring clear environmental and socio-economic benefits shows no sign of waning.
Inflation is here to stay, but how long is the question investors struggle to answer. In the meantime, super funds Cbus and UniSuper have adjusted their portfolio accordingly.