Core Insights - Asian investors are increasingly focusing on overseas asset allocation, particularly in U.S. government bonds, securitized products, and syndicated loans, aiming to enhance returns while managing credit risk [1][4] - The demand for structured notes in wealth management and retail sectors is on the rise, with over 93,000 non-listed structured products expected to be issued in the Asia-Pacific's top five markets in 2024, generating an estimated sales volume of $226.5 billion, a 21% increase year-on-year [2] - U.S. trade policy changes, including tariffs on imports, are impacting emerging Asian markets, leading investors to seek safer assets like U.S. government bonds and securitized products [3][4] Investment Trends - Asian investors are diversifying their portfolios by increasing allocations to high-quality foreign currency assets, such as Australian dollar-denominated RMBS and U.S./Euro CLOs, while maintaining investments in local bonds [2][4] - The appeal of U.S. dollar-denominated assets is bolstered by their liquidity and transparency, with the U.S. government potentially easing capital market regulations further enhancing attractiveness [5][6] Risk Management - U.S. Treasury bonds are viewed as attractive due to their stable returns and low risk, with Asian investors also favoring CMO and RMBS, which typically yield 70 to 80 basis points higher than U.S. Treasuries [6] - Investors are increasingly interested in alternative assets like CLOs and ABS, which offer higher yields but come with increased credit risk, emphasizing the need for transparency in investment decisions [6] Market Dynamics - The issuance volume in the Asian international bond market remains significantly below 2021 levels, with expectations for a rebound in 2024 hindered by U.S. tariff policies and market volatility [7] - In contrast, the issuance of U.S. dollar debt remains strong, providing necessary liquidity for investors, who continue to view dollar assets as a strategic allocation [7]