Developed Asia Bond

Developed Asia bond mutual funds and ETFs invest the majority of their... Developed Asia bond mutual funds and ETFs invest the majority of their assets in government and corporate debt of developed Asian countries, which includes Japan, South Korea, Singapore, and Taiwan. These funds can be actively or passively managed and may seek to track or outperform a particular benchmark. They may hedge foreign currency risk, or elect to leave themselves exposed to fluctuations in other nations’ currencies. Depending on their mandate, these funds may focus on investment-grade bonds, high-yield (a.k.a. junk bonds), or a mix of credit quality. Japan is by far the largest issuer of debt in Developed Asia, public debt sitting at over US$9.0 trillion as of 2023. South Korea, by contrast, had government debt of around US$900 billion in 2023. Investors purchase these funds for capital growth and income. In addition, they are attracted to the stable nature of these nations’ economies. These funds are not without risk, however. In the case of Japan, its government debt is so high that there are fears the central bank will monetize it (print money and cause rapid inflation). Meanwhile, Taiwanese debt could be a risk if China decides to further exert its influence. Last Updated: 12/27/2024 View more View less

Developed Asia bond mutual funds and ETFs invest the majority of their assets in government and corporate debt of developed Asian countries, which includes Japan, South Korea, Singapore, and Taiwan. These funds can... Developed Asia bond mutual funds and ETFs invest the majority of their assets in government and corporate debt of developed Asian countries, which includes Japan, South Korea, Singapore, and Taiwan. These funds can be actively or passively managed and may seek to track or outperform a particular benchmark. They may hedge foreign currency risk, or elect to leave themselves exposed to fluctuations in other nations’ currencies. Depending on their mandate, these funds may focus on investment-grade bonds, high-yield (a.k.a. junk bonds), or a mix of credit quality. Japan is by far the largest issuer of debt in Developed Asia, public debt sitting at over US$9.0 trillion as of 2023. South Korea, by contrast, had government debt of around US$900 billion in 2023. Investors purchase these funds for capital growth and income. In addition, they are attracted to the stable nature of these nations’ economies. These funds are not without risk, however. In the case of Japan, its government debt is so high that there are fears the central bank will monetize it (print money and cause rapid inflation). Meanwhile, Taiwanese debt could be a risk if China decides to further exert its influence. Last Updated: 12/27/2024 View more View less