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HSBC Global Investment Funds – Asia High Yield Bond Fund

Important Information

  • The Fund invests mainly in Asian high yield bonds.
  • The Fund is subject to the risk of investing in emerging markets.
  • Debt instruments with loss-absorption features, non-investment grade bonds and unrated bonds are subject to additional risks and volatility.
  • Because the Fund’s base currency, investments and classes may be denominated in different currencies, investors may be affected adversely by exchange controls and exchange rate fluctuations. There is no guarantee that the currency hedging strategy applied to the relevant classes will achieve its desired result.
  • The Fund may pay dividends out of capital or gross of expenses. Dividend is not guaranteed and may result in capital erosion and reduction in net asset value.
  • The Fund may invest in financial derivative instruments for investment purpose which may lead to higher volatility to its net asset value.
  • The Fund's investments may involve substantial credit, currency, volatility, liquidity, interest rate, tax and political risks. Investors may suffer substantial loss of their investments in the Fund.
  • Unit trusts are NOT equivalent to time deposits. Investors should not invest in the Fund solely based on the information provided in this document and should read the offering document of the Fund for details.

 

HSBC Global Investment Funds – Asia High Yield Bond

Seeks to achieve a higher level of income and capital appreciation through investing primarily in a diversified portfolio of higher yielding Asian bonds

Asia high yield: Standing tall in a low yield world

Asia high yield video Singapore - December 2020


Why invest in Asia high yield?

Improved Valuations of Asian high yield bonds

  • Asian high yield bonds trade at attractive valuations versus the historical average and offer pockets of relative value versus other regions
  • The relative short duration of Asia high yield bonds may make them less sensitive to interest rate movements

Yield to maturity (%)

 

Source: JP Morgan, BAML as of 31 December 2020
Investment involves risks. The yield to maturity shown above is based on the following indices and for reference only. It is not indicative of the yield or returns of the Fund. Yield is not guaranteed. A positive yield does not imply a return.

US HY Corporate –ICE BofaUS High Yield Index; Euro HY Corporate –ICE BofAEuro High Yield Index; Asia HY Corporate –JP Morgan Asia Credit Corporate Index Noninvestment Grade; EM HY Corporate –JP Morgan Corporate Emerging Markets Bond Broad Diversified Index Noninvestment Grade

Historical information is shown. Past performance of is not necessarily indicative of future performance.

Solid fundamentals of Asian high yield bonds than in the past

  • Fundamentals for Asian high yield corporates have been on an improving trend, indicating that a lot of Asian high yield issuers are more equipped to weather uncertainties in the investment environment

Fundamentals of Asian high yield corporates
Net debt / EBITDA is trending down

Net debt / EBITDA


 

The Fund may not invest in the same corporates which the charts above relate to.

Fundamentals of Asian high yield corporates
Adequate liquidity with cash / total debt rising

Cash / total debt


 

The Fund may not invest in the same corporates which the charts above relate to.

Source : Bloomberg and J.P.Morgan. Estimates; as of December 2020
Historical information is shown. Past performance of is not necessarily indicative of future performance.

Diversification benefits

  • Asian high yield bonds exhibit low correlation to other asset classes
  • Asian high yield has the potential to improve returns and even lower the volatility of a global high yield bond portfolio, offering good diversification

Correlation of bond spreads

Asia high yield EM investment grade EM high yield US investment grade US high yield Euro investment grade Euro high yield
Asia high yield 1.00
EM investment grade 0.34 1.00
EM high yield 0.63 0.82 1.00
US investment grade 0.61 0.60 0.76 1.00
US high yield 0.50 0.70 0.78 0.75 1.00
Euro investment grade 0.53 0.50 0.65 0.74 0.65 1.00
Euro high yield 0.58 0.52 0.70 0.72 0.75 0.84 1.00

Source: Bloomberg, JP Morgan, BAML, HSBC Global Asset Management; Correlation calculated from spreads, for the 5-year period as of 5 January 2021.
Historical information is shown. Past performance of is not necessarily indicative of future performance.

Based on the following indices and for reference only.

Asian IG –J.P. Morgan JACI Investment Grade Corporates Blended Spread; Asian HY–J.P. Morgan JACI Non-Investment Grade Corporates Blended Spread; Asian Composite –J.P. Morgan JACI composite Blended Spread; EM IG Corp –J.P. Morgan Corporate EMBI Diversified High Grade Blended Spread; EM HY Corp –J.P. Morgan Corporate EMBI Diversified High Yield Blended Spread; US IG Corp –Bank of America Merrill Lynch (ICE) US Corporate Index Gov OAS; US HY Corp – Bank of America Merrill Lynch (ICE) US High Yield Corporate Index Gov OAS; Euro IG Corp – Bank of America Merrill Lynch (ICE) Euro Corporate Index Gov OAS; Euro HY Corp –Bank of America Merrill Lynch (ICE) Euro High Yield Corporate Index.


Why consider the Fund?

Strong credit selection process

Stringent credit selection process

Comprehensive bottom up credit process designed to systematically avoid defaults or credit deterioration

Managed by award winning Asian fixed income team

Managed by award winning Asian fixed income team

Experienced Asian Fixed Income team with 30 investment professionals with offices in Hong Kong, Shanghai, Taipei and Mumbai.

Source: HSBC Global Asset Management, data as of December 2019

Solid track record

Flexible, diversified approach

The fund has the flexibility to invest in investment grade bonds and off benchmark names

Stands out from peers

Equipped to navigate volatile markets

In February 2020, the fund manager decreased the fund’s exposure to riskier names ahead of the volatility, while increasing allocation to the most liquid parts of the market

Solid track record

Long track record of HSBC Global Asset Management

HSBC Global Asset Management has established a solid track record in managing a dedicated Asia high yield strategy since 2011

For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or market conditions. Awards won by HSBC Global Asset Management includes Best of the Best Awards for Asian Bond House category by Asia Asset Management 2015, 2016, 2017, 2018, 2020. Past performance of the managers are not indicative of future performance.


Resources


This page is prepared for general information purposes only and does not have any regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. This page does not constitute an offering document and should not be construed as a recommendation, an offer to sell or the solicitation of an offer to purchase or subscribe to any investment.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Investors and potential investors should not invest in the Fund solely based on the information provided in this document and should read the prospectus (including the risk warnings) and the product highlights sheets, which are available upon request at HSBC Global Asset Management (Singapore) Limited (“AMSG”) or our authorised distributors, before investing. You should seek advice from a financial adviser. Investment involves risk. Past performance of the managers and the funds, and any forecasts on the economy, stock or bond market, or economic trends that are targeted by the funds, are not indicative of future performance. The value of the units of the funds and income accruing to them, if any, may fall or rise and investor may not get back the original sum invested. Changes in rates of currency exchange may affect significantly the value of the investment. AMSG has based this document on information obtained from sources it reasonably believes to be reliable. However, AMSG does not warrant, guarantee or represent, expressly or by implication, the accuracy, validity or completeness of such information.

HSBC Global Asset Management (Singapore) Limited
10 Marina Boulevard, Marina Bay Financial Centre, Tower 2, #48-01, Singapore 018983
Telephone: (65) 6658 2900 Facsimile: (65) 6225 4324
Website: www.assetmanagement.hsbc.com/sg
Company Registration No. 198602036R