Aberdeen Standard Investments (ASI) has inked a strategic partnership with China Construction Bank International Asset Management (CCBIAM), to allow the two asset managers to collaborate on product innovation and investment research, and launch a new fund focusing on Belt and Road opportunities.
At least 80% of the fund will be invested in US dollar-denominated emerging market debt, including frontier market bonds, with significant exposure to Asian and China credit, according to a statement.
ASI said in the announcement that with the BRI investment universe reaching $3.8trn across sovereign and corporate bonds, there are "ample opportunities" for investors seeking to diversify from low-yielding developed market bonds.
Asian and China credit are offering appealing risk-adjusted returns"
"Asian and China credit are offering appealing risk-adjusted returns, valuations look relatively attractive and investors are being paid for the risk they take,"Adam McCabe, ASI head of fixed income -Asia and Australia.
The fund will be managed by ASI's Asian Fixed Income team, with support from the firm's wider Emerging Market Debt team. CCBIAM will act as an investment adviser and use its knowledge of the BRI and Chinese bond issuers to provide its insight as an input into ASI's decision-making process.