Malaysia’s UOB Asset Launches India Bond Fund Before Inclusion

United Overseas Bank (UOB) Asset Management Sdn Bhd, the Malaysian unit of Singapore's UOB Asset Management, has launched a new India bond fund ahead of MSCI's potential inclusion of Indian bonds in its emerging market indexes. The fund, named UOB Indian Rupee Bond Fund, will invest primarily in fixed income securities denominated in Indian rupees issued by the Indian government and Indian corporations.

MSCI (Morgan Stanley Capital International), a leading index provider, has announced its intention to add Indian bonds to its emerging market indexes in 2023, subject to certain conditions being met. This decision could lead to significant inflows into Indian bonds as index funds track these indices and rebalance their portfolios accordingly.

The UOB Indian Rupee Bond Fund aims to provide investors with capital appreciation and income by investing in a diversified portfolio of Indian rupee-denominated bonds. The fund will follow a bottom-up investment approach, focusing on credit analysis and yield differentials to select securities for investment.

The fund's investment objective aligns with the expected inclusion of Indian bonds in MSCI's emerging market indexes, allowing Malaysian investors to gain exposure to this asset class before the potential influx of capital. Additionally, the fund offers investors a hedged option, with an optional currency hedge to mitigate foreign exchange risk.

UOB Asset Management has a strong presence in both Malaysia and India, with over RM12 billion (approximately USD 2.8 billion) in assets under management in Malaysian ringgit and over INR 100 billion (approximately USD 1.3 billion) in assets under management in Indian rupees as of December 2021. The launch of the UOB Indian Rupee Bond Fund further strengthens their position in the Malaysian market and demonstrates their commitment to providing investors with access to diverse investment opportunities.

In conclusion, UOB Asset Management's new India bond fund, the UOB Indian Rupee Bond Fund, offers Malaysian investors an opportunity to gain exposure to Indian bonds before MSCI's potential inclusion of this asset class in its emerging market indexes. The fund follows a bottom-up investment approach and provides an optional currency hedge to mitigate foreign exchange risk. With a strong presence in both Malaysia and India and over RM12 billion in assets under management in Malaysian ringgit and over INR 100 billion in assets under management in Indian rupees, UOB Asset Management continues to provide investors with diverse investment opportunities.