Asia high-yield ETF inflows surge even as performance plummets

Asia high-yield ETF inflows surge even as performance plummets

Asia high-yield exchange traded funds have been attracting substantial inflows despite a huge drop in returns in the second half of the year.

The Singapore-listed iShares Barclays USD Asia High-Yield Bond ETF attracted $1.37bn in net inflows in the last three months of 2021 after dominating net inflows into ETFs listed on Singapore’s stock exchange last year.

In Hong Kong, the Premia Partners’ Premia China USD Property Bond ETF, which became the territory’s first high-yield bond ETF when it was listed in April last year, attracted $10.22m in net inflows during the fourth quarter in 2021, data from Morningstar show.

Elsewhere, Haitong International’s London-listed Tabula Haitong Asia ex-Japan High Yield Corporate Bond ESG ETF, which was launched in September last year, saw its assets grow tenfold to $205.9m over the same period.

The inflows have continued to surge even as the performance of these Asia high-yield ETFs has plummeted over the past six months.

The net asset value of the BlackRock Asia high-yield ETF dropped more than 23 per cent between May 2021 and mid-January 2022, while the Premier Partners property bond ETF has dropped more than 40 per cent since its inception.

The Asia high-yield bond market has been dominated by US dollar-denominated debt issued by Chinese property giants that are also facing tightening curbs on borrowing and declining home sales.

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