3 Insights with Topic: Asia ex-Japan
Asia USD Investment Grade Credits and Saudi Government Sukuk have outperformed in a global fixed income market that has been shaken by fiscal profligacy, geopolitical tensions, tariff uncertainties, and even oil market volatility. The Premia J.P. Morgan Asia Credit Investment Grade USD Bond ETF and Premia BOCHK Saudi Arabia Government Sukuk ETF have emerged from this stress-test as effective alternatives in portfolios – delivering stable income, and uncorrelated returns, while still trading at a spread over US Treasuries with further room for spread compression. Indeed, their higher yields of 4.8%-4.9% (4.8% for the Premia Asia Credit Investment Grade USD Bond and 4.9% for the Premia Saudi Government Sukuk) are outstanding, considering their lower corporate and government leverage, and comparable or superior credit ratings versus global peers.
Jul 24, 2025
Asia ex-Japan investment grade credits should continue to outperform their global peers in 2025, amidst risks in the US of a continued rise in US Treasury yields, at a time when corporate credit spreads in the US are already at cyclical lows. On the other hand, Asia ex-Japan credits will likely be supported by a combination of monetary easing, shorter duration, the offer of significant yield pickups, credit upgrades and likely lower issuance. Further to Part 1 and Part 3 of our 2025 outlook which dealt with the US and ASEAN market outlook, in this article we discuss how Asia ex-Japan US Dollar Investment Grade Credits (using JACI IG as the investment universe) generate allocation alpha in a complex landscape dominated by concerns over economic uncertainties in the U.S – about its fiscal outlook, a resurgence in inflation, rapidly rising government debt and the impact of radical policy plans.
Jan 27, 2025
As the US Fed rate cut gets imminent, the liquid Asia credit market also is set to benefit from a number of strong tailwinds. In addition to favourable macroeconomic fundamentals, the heterogenous region also offers benefits of broad geographic diversification benefits and positive reinforcement from continued market liberalization and more investor friendly reforms. Within this space, Asian investment grade (IG) bonds also enter a favourable “Goldilocks” scenario in particular, represent a sweet spot that international allocators sometimes overlook, offering meaningfully higher yields, better credit ratings, and shorter duration than their peer IG cohorts from the US and Europe.
Sep 16, 2024