Asian Bond Fund - ABF

DEFINITION of 'Asian Bond Fund - ABF'

A type of bond fund launched by the Executives' Meeting of East Asia and Pacific Central Banks (EMEAP) group that allows its members to invest in bonds issued by Asian sovereign issuers in EMEAP economies. Managed by the Bank for International Settlements, the inaugural Asian bond fund was a US$1 billion issue that was launched in June 2003.

BREAKING DOWN 'Asian Bond Fund - ABF'

Although the original ABF issue was denominated in U.S. dollars, the second ABF issue was denominated in member currency funds. Overall, the main goal of this bond fund is to further enhance the underdeveloped bond markets of EMEAP member countries by enhancing the efficiency of financial intermediation and promoting financial stability.

Another reason for the establishment of this class of bond funds is to give some Asian countries, who have built up massive foreign reserves, the opportunity to invest in financial assets that would return benefits back to the region.