State Street Global Advisors manages the ABF Pan Asia Bond Index Fund (PAIF), an exchange-traded fund listed on the Hong Kong stock exchange. The fund invests in eight regional currency bond markets in Asia as it seeks to track the returns of the iBoxx ABF Pan-Asia Index.
While the United States subprime crisis and inflationary risks stalked financial markets, Asian bonds offered a safe port for investors, said Ramon Maronilla, vice-president and senior portfolio manager at State Street Global Advisors global fixed income group.
How has the US economy fared as a result of the subprime crisis?
The potential for systemic collapse is behind us, and some players have suggested that the worst of the write-downs are over, having reached about US$400 billion at the last count. However, there are still some lingering risks. Part of this is from insurers, who are insuring trillions of dollars of debt, and there is a concern that they might not have enough capital to cover it.
In terms of just the US housing market in general, it seems that the precipitous fall in property prices has slowed down, but it is a little too early to say that they have bottomed out. Inventories are still at an all time high, and as long as they continue to build there will be downward pressure on prices.
US economic growth did surprise on the upside, and was not as gloomy as people thought. That said, it's not so much that things have really gotten that much better, rather the attention has been drawn a little away from subprime and growth and towards inflation.
