FAX - FAX: With The China Stress Behind Us Asian Debt Looks Attractive

2024-05-09 05:52:21 ET

Summary

• abrdn Asia-Pacific Income Fund is a fixed-income closed-end fund that invests in EM sovereign and corporate bonds with an Asia focus.
• Despite its stated distribution yield of 12%, investors are actually receiving a true yield of roughly 7% due to the return of capital.
• With China's economy improving and the expectation of a weaker dollar in 2025, FAX is an attractive cyclical play.
• FAX is trading with a wide -13% discount to net asset value, towards the bottom of its historic range.

Thesis

We last wrote an article regarding the abrdn Asia-Pacific Income Fund ( FAX ) closed-end fund roughly two years back, article entitled ' FAX: Just Get Out And Don't Look Back '. The CEF experienced a massive -15% drawdown after our article, before leveling out:

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