HSBC Global Asset Management has launched its HSBC Collective Investment Trust − HSBC Asia High Income Bond Fund in Hong Kong, which will be available to private banking clients.
The fund aims to pay monthly dividends to generate an income stream, while dividend is not guaranteed and may be paid out of capital.
It aims to invest in fixed income securities which provide higher yield compared to their peers and the potential for capital appreciation over the medium to long term.
A minimum of 70% of the fund’s net asset value will be invested in a diversified portfolio of fixed income securities issued in Asia. It will be invested to a maximum of 45% in Asian high yield bonds within the portfolio, in order to maximise the opportunities for income potential.
The fund’s portfolio will comprise a good mix of exposure to high growth Asian countries such as India, Indonesia and China, as well as developed markets such as Singapore and Korea.
Diversification across Asia also helps to minimise volatility during times of market stress due to different country macro dynamics.
The fund is available in six currencies, including Australian dollar, Canadian dollar, Euro, Chinese yuan, US dollar and Hong Kong dollar.
Commenting on the launch of the fund, Alfred Mui, head of Asian credit also manager of the fund, said: ‘The income strategy that many investors pursued and benefited from in 2016 will likely continue to play out this year, on the back of the current political environment, rising aging population, ample liquidity in the market and benign interest rate trends despite potential rate hikes.
‘What really changed is the expectation for a pick-up in inflation has driven bond investors to seek higher income.
‘To accomplish this, the fund is invested with an approach that allows flexible allocation in order to optimise the risk-adjusted yields. As a value-based manager, we focus on company fundamentals and pick names and sectors that offer attractive mispriced opportunities.’