Increased Portfolio Diversification From Asian Bonds

* Reuters is not responsible for the content in this press release.

Thu Apr 22, 2010 12:44pm EDT

  PHILADELPHIA, PA, Apr 22 (MARKET WIRE) -- 
The April 14 decision by Singapore to tighten monetary policy via its
currency band, the Singapore dollar, together with continuing speculation
regarding Chinese renminbi revaluation, highlights the compelling
long-term attraction in Asian fixed income securities, according to
Aberdeen Asset Management, the global asset management group.

    Asian fixed income has traditionally been under-represented in portfolios
and benchmarks. However, Aberdeen is seeing increased interest in the
asset class, given the strength of Asian economies and the growing need
among institutions to diversify their fixed income exposure. 

    Asia has emerged as a capital exporting bloc that, thanks to high savings
and prudent fiscal management, has been living within its means. Unlike
the West, current accounts are mainly in surplus, while deficits
(relative to GDP) are lower in most cases. Rating agencies testify to
this resilience, with recent sovereign upgrades in South Korea and
Indonesia. Furthermore, it appears that, with Asia likely to lead global
growth for some years to come, the credit outlook remains positive. 

    In the near term, a gradual reduction in government stimulus used to
boost domestic consumption and growing fears of inflation are likely to
result in higher interest rates in Asia. Aberdeen believes this should
lead local currencies to appreciate against key global currencies, given
the contrasting outlook for growth in the major Western economies. In
addition, with pressure on China building to allow the renminbi to
strengthen, any adjustment there is likely to see other Asian countries
follow.

    While Aberdeen is "structurally bullish" on currency prospects, it also
sees selective value in credit, even though spreads over U.S. Treasuries
have narrowed in the past 12 months. 

    Conventionally, Asian local currency bonds comprise government bonds in
local currencies. They provide currency diversification, either directly
or synthetically, in markets which are nominally closed, such as China's,
through the use of derivatives. The markets are lowly correlated within
the region as well as with the developed markets, thereby adding greatly
to global portfolio diversification. 

    Aberdeen has a dedicated team of 12 Asian fixed income investment
professionals located in the region managing over $5.2 billion in assets.
These include specialists in Asian local currency bonds, currency and
credit research. Under Anthony Michael, the team manages the Aberdeen
Asia Bond Institutional Fund (CSABX), which is the only dedicated Asian
Bond fund for U.S. 40 Act mutual funds, according to data from
Morningstar(1). Details are available through Aberdeen's website at
www.aberdeen-asset.us/asiabond

    Anthony Michael, Aberdeen's head of fixed income - Asia Pacific, comments:

    "Asia's fixed income markets offer tremendous opportunities to
international investors in search of portfolio diversification and return
enhancement. This is because of the region's superior fundamentals and
its sheer variety, with countries rated from triple A to
sub-investment-grade."

    "There is still a perception that Asia is part of a larger emerging
market universe, with all the contingent risk that used to imply. But if
you make the effort to understand the market idiosyncrasies, you can
exploit the mispricing which results." 

    Aberdeen's Asian portfolio management team will be visiting several major
cities in the U.S. to discuss their views with institutional investors
and Registered Investment Advisors during the weeks of May 17 and May 24.
Please call U.S. business development manager Mark Ouimet at 215-405 2417
or email him at mark.ouimet@aberdeen-asset.com. For a more detailed
introduction to this growing asset class, Aberdeen has produced a
brochure which examines the Asian fixed income market in more detail, its
characteristics, differences and opportunities. Please contact Mark
Ouimet for further details.


(1) Data generated from Morningstar Direct based on a universe of U.S. open- 
    ended world bond funds as of March 16, 2010.

    
For further information about Aberdeen Asset Management, please
contact:
 Katie Cowley, T: 215-405-2423 or E:
katie.cowley@aberdeen-asset.com

    NOTES TO EDITORS

    Concentrating investments in the Asia-Pacific region subjects the Fund to
more volatility and greater risk of loss than geographically diverse
funds.

    About Aberdeen worldwide
 Aberdeen Asset Management Inc. is the
wholly-owned U.S. subsidiary of Aberdeen Asset Management PLC ("Aberdeen
Asset"), a global investment management group which is headquartered in
Aberdeen, Scotland, and manages more than $230 billion of assets for both
institutions and private individuals (as of Dec. 31, 2009). The group
employs over 1,800 staff across 26 countries worldwide.

    Aberdeen's Asia Pacific fixed income capability

    At Aberdeen, we believe a locally-based team of Asian fixed income
specialists is the most effective approach to managing this unique asset
class. The wide diversity and idiosyncratic characteristics of the
region's bond markets makes locally-based investment an essential
requirement. 

    Our Asian fixed income team is centered in Singapore (with a smaller team
in Bangkok) and is composed of two teams of experienced investment
professionals -- one with dedicated responsibility for Asian credit and
another for Asian interest rates and currency. We believe this structure
provides our specialist teams with the freedom to focus on
idea-generation and the identification and exploitation of alpha
opportunities within their area of expertise. 

    To be successful in Asia's bond markets requires a disciplined analytical
approach through proprietary research into the global macroeconomic
environment and developing a deep understanding of the region's political
and policy influences, together with knowledge of local bond market
technicals and idiosyncrasies.

    Important information

    The above is for information purposes only and should not be considered
as an offer, or solicitation, to deal in any of the investments mentioned
herein. AAM does not warrant the accuracy, adequacy or completeness of
the information and materials contained in this document and expressly
disclaims liability for errors or omissions in such information and
materials. 

    Some of the information in this document may contain projections or other
forward looking statements regarding future events or future financial
performance of countries, markets or companies. These statements are only
predictions and actual events or results may differ materially. The
reader must make his/her own assessment of the relevance, accuracy and
adequacy of the information contained in this document and make such
independent investigations, as he/she may consider necessary or
appropriate for the purpose of such assessment. 

    Any opinion or estimate contained in this document is made on a general
basis and is not to be relied on by the reader as advice. Neither AAM nor
any of its agents have given any consideration to nor have they made any
investigation of the investment objectives, financial situation or
particular need of the reader, any specific person or group of persons.
Accordingly, no warranty whatsoever is given and no liability whatsoever
is accepted for any loss arising whether directly or indirectly as a
result of the reader, any person or group of persons acting on any
information, opinion or estimate contained in this document. 

    AAM reserves the right to make changes and corrections to its opinions
expressed in this document at any time, without notice.

    Foreign securities are more volatile, harder to price and less liquid
than U.S. securities. These risks are enhanced in emerging markets
countries. Equity stocks of small and mid-cap companies carry greater
risk, and more volatility than equity stocks of large-cap companies. 

    Investors should carefully consider a fund's investment objectives,
risks, fees, charges and expenses before investing any money. To obtain
this and other fund information, please call 866-667-9231 to request a
prospectus, or download a prospectus at www.aberdeen-asset.us. Please
read the prospectus carefully before investing any money.

    Investing in mutual funds involves risk, including possible loss of
principal. There is no assurance that the investment objective of any
fund will be achieved.

    Aberdeen Funds are distributed by Aberdeen Fund Distributors LLC, 1735
Market Street, 32nd Floor, Philadelphia, PA 19103. Member FINRA and SIPC.

    

Contact:

Katie Cowley
T: 215-405-2423 
E: katie.cowley@aberdeen-asset.com 

Copyright 2010, Market Wire, All rights reserved.

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