Growing into a core asset class

Asian local bond markets offer attractive returns for less risk than would be expected but are still under-represented in global bond indices

Asian bond markets have gone through a significant transformation over the past decade, but few investors have picked up on this fact so far. Although Asian local currency bonds (excluding Japan) now represent the fourth-largest domestic bond market in the world, their representation in the widely used global bond indices, such as the Citi WGBI Index, is much smaller. Funds that are benchmarked against these types of global bond indices therefore do not provide investors with significant exposure to the region's fast-growing bond markets. However, the asset class has many benefits that shou...