Asia credit grew at 17% CAGR between 2010 and June 2021. Despite recent negative headlines concerning the China property sector that cautioned some investors, Asia credit has continued to grow as a solid asset class, reaching A$1.8 trillion ($1.7 trillion). The asset class is well-supported by Asian investors who understand the region’s issuers better and tend to hold on to the Asian credits for their attractive risk-adjusted returns potential and downside mitigation, even during times of global market turbulence.
Asia credit suffered notably last year, prompting investors to think whether it will see the light at the end of the tunnel in 2022. While volatility persists, we believe the market remains a high-quality segment of the emerging market fixed income opportunity set with its diversification benefits and attractive risk-adjusted returns potential.
A growing A$1.8 trillion asset class
