HSBC Global Investment Funds – Asia High Yield Bond Fund

• 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.

• 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.

• 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.

• 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

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.