Asian investors are doing a disservice to their investment portfolios by not diversifying into bonds, a local fund manager says.
Rosa Wang, a senior portfolio manager, fixed income, for Dresdner RCM Global Investors Asia, said many Asian investors' allocation into bonds during the past decade had been zero.
'Right now, the environment is good for bonds. We feel we are in a deflationary environment, not an inflationary one and this is something which most people have not been use to. It is quite good for bonds,' she said.
Ms Wang, who will be speaking on fixed income at the conference, said the economy was in a period where prices in retail, exports and commodities were decreasing, making it beneficial to bonds.
She said bonds provided a fixed payment, usually annually or semi-annually. The downside was the fact inflation ate into the value of the payment but 'we're currently having the reverse of that'.
'We are having a period where, globally, prices are decreasing and, in that environment, bonds are very attractive,' Ms Wang said.
Dresdner RCM, the international asset management arm of Dresdner Bank, is bullish on government bonds from the United States, Britain, Italy, Spain, Australia and New Zealand.