In June 2002, EMEAP formally proposed the concept of Asian Bond Funds. The basic idea is that EMEAP members will each use a certain amount of foreign exchange reserves to build an index-tracking passive fund to invest in bonds issued by Asian economies.

In the nearly one year since then, EMEAP members have conducted in-depth discussions on the technical issues of the first Asian Bond Fund (ABF1) and determined the two major functions of ABF1 to improve reserve investment and promote the development of the bond market.