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Schroders revamps Asian bond chief’s fund as credit vehicle

Schroders revamps Asian bond chief’s fund as credit vehicle

Schroders has opted to completely restructure Rajeev De Mello’s Singapore-domiciled Asian Bond fund to open up the strategy to be a US-denominated approach focused on regional credit, Citywire Selector has learned.

The change to Schroder Asian Bond fund, which is set to come into effect on September 1, will see the fund rebranded as the Schroder Asian Credit Opportunities fund.

At present, the fund exists as a Singapore dollar-denominated feeder fund which invests largely into the Schroder ISF Asian Bond Absolute Return fund. However, the change, will effectively create a standalone, direct investment vehicle.

In addition, De Mello will move into a stewardship role with direct management of the fund falling to Angus Hui and Peng Fong Ng. They will additionally be supported by Schroder's 20-strong Asian fixed income team.

Hui and Ng's focus will turn from absolute return-focused investments to fixed and floating rate bonds issued by governments, government agencies and corporate credit primarily drawn from Asian issuers.

De Mello, who is head of Asian fixed income at the firm, had run the current Singapore-domiciled fund since replacing How Phuang Goh on the fund in July 2011. He also oversees several funds across Asian and emerging debt, including the aforementioned Asian Bond Absolute Return fund.

This new approach will operate with a higher volatility than its previous version but the total expense ratio has dropped from 1.60% to 1.30%. This is based on an estimated fund size of US$75 million as at December 31 2015.

The Schroder Asian Bond fund has lost 2.3% in US dollar terms over the three years to the end of July 2016. This compares to a loss of 2.4% by the average manager in the Absolute Return Other sector over the same analysis period.

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