The Region’s First and Largest Asian Fixed Income ETF1
Launched in 2005, the ABF Pan Asia Bond Index Fund (PAIF) pioneered the Asian fixed income ETF industry. It provides an innovative, easy-to-access and cost-efficient solution to invest in a diversified portfolio of Asian local currency government and quasi-government bonds in one single trade.
1. PAIF is the first Asian local currency bond ETF.
2. In 2005, PAIF was launched as part of an important initiative by Asia Pacific's 11 leading central banks and monetary authorities to strengthen the region's bond markets.
3. PAIF is benchmarked to the Markit iBoxx ABF Pan-Asia Index.
4. PAIF invests in the sovereign and quasi-sovereign local currency bonds of eight major Asian economies, including China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore and Thailand.
5. Domiciled in Singapore, PAIF was listed in Hong Kong in 2005 (SEHK stock code: 2821) and cross-listed in Japan in 2009 (TSE stock code: 1349).
6. PAIF is currently the largest fixed income ETF in Asia Pacific1.
7. Since launching, PAIF's assets under management has grown steadily to reach US$3.7 billion2.
8. PAIF has been generating positive returns since its inception, delivering an annualized return of 4.20%3
9. PAIF has delivered positive returns in 12 out of the past 15 calendar years4.
10. PAIF provides investors with a potential stream of income, with the current yield at 2.21% per annum5 (Dividend amount or dividend rate is not guaranteed).
11. Offering easy and low-cost access to Asia's local bond markets, PAIF allows investors to diversify their portfolios with around 400 local currency bonds in one single trade2.
12. With relatively low expense ratio of 0.18%6, investors can keep more of what they earn.
13. PAIF's portfolio has an average credit quality of A+2.
14. China's local bonds comprise around 25% of PAIF's exposure2, which allows the fund to benefit from the gradual opening up of China's bond market and the inclusion of Chinese bonds in global indices.
15. PAIF is a crucial part of the initiative to develop Asia's local bond markets. It started to participate in securities lending in June 2018 to deepen secondary market liquidity.
Why Invest in Asian Local Currency Bonds?
Favourable Risk-Return Profile
The macro fundamentals of many Asian governments remain robust, and they will likely continue to be a growth driver as the global economy recovers. Investors, therefore, have an opportunity to obtain a good yield pickup without taking on excessive risk. In fact, Asian bonds have historically demonstrated a risk-return profile that is proportional to that of US Treasuries.
Potential for Additional Yield via Local Currency Appreciation
We expect currency appreciation will continue to be an important source of potential returns moving forward. Current US-dollar strength has depressed currency gains in Asian local currency bonds, but over the medium to long term, there is a good chance of a rebound. In the meantime, US-dollar strength presents attractive entry opportunities for Asian local currency
A 'Back to Basics' Diversified Portfolio Construction Strategy
In the increasingly interconnected world, correlations between Asian local currency bonds and other major asset classes have inevitably risen. Still, they remain low enough to allow such assets to add valuable diversification benefits to investors' portfolios.
1. Source: Bloomberg Finance L.P., as of 30 September 2021
2. State Street Global Advisors, as of 30 September 2021.
3.State Street Global Advisors, as of 30 September 2021. Past performance information is not indicative of future performance. Investors may not get back the full amount invested. The computation basis of the annualized performance is based on net-of-fees returns in USD terms on NAV-to-NAV basis, with all distributions reinvested. Fund Inception Date: 29 June 2005. Past performance information: -4.44% (Year-to-date as of 30 September 2021), 8.86% (2020), 7.91% (2019), 0.11% (2018), 9.35% (2017), -0.54% (2016) and -3.35% (2015).
4. State Street Global Advisors, as of 30 September 2021. The computation basis of the calendar-year performance is based on calendar year end, NAV-to-NAV, with dividend reinvested. Calendar-year performance shows by how much the PAIF increased or decreased in value during the calendar year being shown. Performance data has been calculated in USD, including ongoing charges and excluding subscription fee and redemption fee you might have to pay.
5. State Street Global Advisors, as of 30 September 2021. Current yield = Sum of dividend per share amounts that have gone ex-dividend over the prior 12 months, divided by the current price. Dividend amount or dividend rate is not guaranteed.
6. Source: State Street Global Advisors as of 30 June 2021. The ongoing charges figure is based on expenses for the year ended 30 June 2021. This figure may vary from year to year. The ongoing charges figure is calculated by adding the applicable charges and payments deducted from the assets of the PAIF and then dividing by the PAIF's average net asset value for the financial year.
This advertisement or publication has not been reviewed by the Monetary Authority of Singapore (the "MAS").
The ABF Pan Asia Bond Index Fund (the 'PAIF') is an authorized unit trust in Hong Kong and Singapore only. Authorization does not imply official recommendation. Nothing contained here constitutes investment advice or should be relied on as such. Past performance of PAIF is not necessarily indicative of its future performance. The prospectus for PAIF is available and may be obtained from State Street Global Advisors Singapore Limited (the "Manager") (Singapore Company Registration number: 200002719D, regulated by the MAS) and authorized participants. Investors should read the prospectus before deciding whether to acquire units in PAIF. The value of units in PAIF and accruing to such units, if any, may fall or rise. The semi-annual distributions are dependent on PAIF's performance and are not guaranteed. Redemption of PAIF’s units could only be executed in substantial size through designated dealers and the listing of PAIF on the Stock Exchange of Hong Kong Limited and the Tokyo Stock Exchange (the 'Stock Exchanges') do not guarantee a liquid market for the units, and PAIF may be delisted from the Stock Exchanges. The Fund's Prospectus is available from State Street Global Advisors or can be downloaded from www.abf-paif.com*.
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All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.
Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates rise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.
Diversification does not ensure a profit or guarantee against loss.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns. Frequent trading of ETF's could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.
The Markit iBoxx ABF Pan-Asia Index referenced herein is the property of Markit Indices Limited and is used under license. The PAIF is not sponsored, endorsed, or promoted by Markit Indices Limited or any of its members.
State Street Global Advisors Singapore Limited: Singapore address: 168 Robinson Road, #33-01 Capital Tower, Singapore 068912 (Company Reg. No: 200002719D, regulated by the Monetary Authority of Singapore). Telephone: +65 6826-7555. Facsimile: +65 6826-7501.