HSBC Asset Management offers new ESG Short Duration Credit Bond Sub-Fund
HSBC today announced the offer of HGIF - ESG Short Duration Credit Bond Sub-Fund, which invests in short duration bonds focused on US crossover opportunities, with the flexibility to invest globally, and on material ESG improvements versus its reference benchmark.
This Sub-Fund is currently exclusive for HSBC retail and private banking customers in Singapore until 30 September 2023. The Sub-Fund is registered as a Recognised Scheme in Singapore.
The Sub-Fund is designed to capture positive environmental, social and governance (ESG) characteristics relative to the investment universe based on HSBC’s proprietary ESG and Lower Carbon Criteria.
With uncertainty still ahead on inflation, interest rates, and economic growth, shorter duration bond funds are compelling in the current environment as they may carry less risk than those with longer duration. They are less sensitive to interest rates moves and may have lower price volatility through the “pull-to-par” effect. The US crossover bond space is a large and diversified segment that is close to $1.7 trillion in market size. In this space, we see compelling risk-adjusted returns for crossover1 bonds as investors can find opportunities due to price distortions or forced selling in the market.
Patrice Conxicoeur, CEO and Head of Southeast Asia, HSBC Asset Management (Singapore), said: “Amid market volatility, it has become even more critical for investors to approach sustainable investing as part of their long-term strategy. Companies that manage their ESG risks and create value for stakeholders – employees, customers, suppliers, the environment, and wider society – are more likely to survive through cycles and thrive in the long term.”
The minimum subscription sum for the HGIF - ESG Short Duration Credit Bond Sub-Fund is SGD1,000. The Sub-Fund’s base currency is in USD, but SGD, AUD, EUR, and GBP hedged classes are also available to investors. It aims to provide long term return by investing in a diversified portfolio of bonds with an expected average duration of between 1 and 3 years and an average credit rating of Investment Grade, while promoting ESG characteristics within the meaning of Article 8 of Sustainable Finance Disclosure Regulation (SFDR).
Jeffrey Yap, Head of Investments and Wealth Solutions, HSBC Global Private Banking (SEA), shared: “We strive to provide investment solutions that cater to client’s diverse needs and values. With this Sub-Fund, investors now have a unique opportunity to invest in such fixed-income securities while also supporting companies meeting certain ESG rating and lower carbon intensity criteria. Investors looking for a long-term total return investment strategy that aligns with their values surrounding ESG principles will find this Sub-Fund a compelling option.”
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