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Daiwa SB Australia Catching Kokusai as Biggest Asian Fund

Daiwa SB Investments Ltd.’s Australian bond fund is poised to overtake Kokusai Global Sovereign Open as Asia’s biggest mutual fund this year, bolstered by demand for the nation’s short-term yields that are higher than those of riskier long-term bonds.

The Daiwa SB Short-Term Australian Dollar Bond Open Fund increased assets almost 10 times from 2009 through 2011 to 1.18 trillion yen ($14.8 billion) as of Dec. 31. Global Sovereign Open shrank from 4.7 trillion yen to 1.85 trillion yen in the same period. Daiwa’s Australia fund handed investors an annual average gain of 16 percent the past three years. Kokusai, which invests in currencies and bonds in the world’s biggest markets, delivered returns of less than 1 percent.