The ABF Pan Asia Bond Index Fund (PAIF), the first regional Asian local currency bond exchange-traded fund (ETF), has reached its 20th anniversary. Managed by State Street Global Advisors, PAIF was launched in 2005 to track the iBoxx ABF Pan-Asia Index, which reflects the returns of Asian currency-denominated bonds from government and quasi-government organisations across eight markets, including China, Hong Kong, and Singapore.
PAIF, domiciled in Singapore, is part of the Asian Bond Fund 2 (ABF2), an initiative by the Executives’ Meeting of East-Asia and Pacific Central Banks (EMEAP) to develop Asian bond markets. Meaghan Victor, head of Intermediary, Asia Pacific at State Street Global Advisors, highlighted the fund’s role in promoting local-currency bond market development post the 1997 Asian financial crisis. “As the creator of the world’s first ETFs, State Street Global Advisors is proud to have worked in partnership with the EMEAP Group in creating PAIF,” she stated.
Since its inception, PAIF has grown to over USD 3.75 billion in assets. The fund’s benchmark, the iBoxx ABF Pan-Asia Index, reduced its minimum outstanding notional threshold for sub-sovereign green bonds in 2022, allowing for more green bond inclusion. Kheng Siang Ng, Asia Pacific head of Fixed Income at State Street Global Advisors, noted, “In the past two decades, the Asian bond market has grown significantly, reflecting a rising interest in Asia’s bond market due to its higher yields and diversification benefits.”
As PAIF continues to evolve, its impact on global institutional investors’ strategic asset allocations remains significant, offering a diverse range of Asian local currency bonds.
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