State Street Global Advisors (SSgA) has been selected to manage the ABF Pan Asia Bond Index Fund (PAIF). PAIF is a component of the Asian Bond Fund 2 (ABF2), an initiative developed by the Executives’ Meeting of East-Asia and Pacific Central Banks (EMEAP), a group of 11 Asian central banks and monetary authorities.
SSgA will run PAIF as a listed open-ended index fund investing in domestic currency sovereign and quasi-sovereign bonds from eight EMEAP economies – China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore and Thailand. iBoxx ABF Pan Asia Index–a new index launched concurrently by International Index Company–will be the benchmark for the PAIF.
“Modeled on cost-effective and efficient exchange-traded funds, PAIF brings the opportunity to enhance development of the bond and capital markets in the Asia-Pacific region–one of the most dynamic and exciting areas of today’s global financial landscape,” said Vincent Duhamel, chief executive of SSgA Asia. “As an active participant in these markets for more than 20 years, State Street is honored to be selected to manage this fund which, with its modest cost and planned accessibility to a larger group of investors, can help to broaden and deepen the region’s investor base.”
During the initial phase, EMEAP central banks provided funding of $1 billion. In its next phase, the fund is expected to be authorized in Hong Kong and Singapore, and open to other public and private sector investors. Subject to approval from relevant authorities, PAIF is intended to be domiciled in Singapore and initially listed in Hong Kong, with additional listings on other EMEAP stock exchanges to be considered at a later stage.