HSBC GIF Global High Yield Bond
Designed for resilience through varying markets
HSBC GIF Global High Yield Bond
IC share: LU07802463191
The global high yield (GHY) asset class has recovered significantly since the March crisis. GHY now delivers an attractive yield of about 5.5 per cent in today’s lower-for-longer environment and going forward, we believe that GHY investors can still be compensated with an attractive carry.
Our HSBC GIF Global High Yield Bond fund is designed for resilience through varying markets. Its risk-aware focus and higher quality tilt has produced superior performance results versus peers this year and over the longer-term.
Today, as several economies and sectors remain fragile and vulnerable to defaults, we believe our proven approach and deep understanding of the risk/reward trade-offs for each security in the portfolio will continue to drive consistently strong risk-adjusted results.
Key features
Strong track record. Top quartile ranking versus largest peers over shorter- and longer-term periods and across varying market environments. Consistency and the strength of our investment approach has led to this resilience and outperformance.
- Delivered superior results in one of the most volatile market periods in history—volatility that created significant dispersion in returns among peers (nearly 7 per cent) in the peak drawdown period
- A risk-aware focus with a higher quality bias: average credit rating of BB/BB- with some tactical exposure to CCCs
- Portfolio of high conviction names based on robust credit and ESG research
- Extremely low default rate in the portfolio historically (average default rate of 0.20 per cent since 2017)
Peer group rank and quartile as at 30/09/2020
YTD |
1 year |
3 years |
5 years |
|||||
Morningstar's Category1 |
Peer group
|
Peer group
|
Peer group
|
Peer group
|
Peer group
|
Peer group
|
Peer group
|
Peer group
|
HSBC GIF Global High Yield Bond |
125/967 |
1 |
136/920 |
1 |
103/630 |
1 |
91/480 |
1 |
Sources: HSBC Asset Management, Morningstar as of 30 September, 2020.
1 Morningstar Sector: EAA OE Global High Yield Bond
Past performance is no guarantee of future returns. Future returns will depend inter alia on market developments, the fund manager’s skill, the fund’s level risk and management costs and if applicable subscription and redemption costs. The return, the value of money invested in the fund may become negative as a result of price losses and currency fluctuations. There is no guarantee that all of your invested capital can be redeemed. Unless stated otherwise, inflation is not taken into account.
Why invest now?
Achieve attractive yield of ~5.5 per cent. In today's lower-for-longer rate environment, GHY offers high income with capital appreciation potential.
- Fiscal and monetary support have provided a big boost to the asset class and should remain a tailwind
- Broad and deep USD2.5 trillion asset class offers extensive diversification opportunities across countries, industries and ratings
HSBC GIF Global High Yield Bond is exposed to the following main risks: Exchange rate risk, Foreign and emerging markets, High Yiel, Asset-backed securities (ABS), Counterparty risk, Liquidity risk, Operational risk, Derivatives risk, Interest rate risk, Default risk, Credit risk, Investment fund risk, CoCo bond risk.
Why invest with HSBC Asset Management ?
Truly global. Portfolio manager actively collaborates with 40+ global credit and ESG research analysts, 10+ global strategists, and teams of specialized portfolio managers (in US, Europe, Asia, EM and Securitized Credit)
- Extensive research and quantitative tools support our investment teams and facilitate the cross-fertilisation of investment ideas
- PMs, credit analysts and ESG specialists are all connected in real-time via CorpRed, HSBC Asset Management’s proprietary database
- The UNPRI Manager Assessment rated HSBC A+ for Strategy and Governance and A+ for main fixed income asset classes
Sources: UNPRI, HSBC Asset Management. For illustrative purposes only.
Important information
- The above performance figures refer to the past and are not a reliable indicator of future returns. The value of investments and any income from them, can go down as well as up. Quartile rank is a term widely used in financial services to denote performance of a fund within its sector. For example a ranking of 1 denotes a Fund in the top 25 per cent of its peer group sector, with a ranking of 4 denoting a fund in the bottom 25 per cent of its peer group sector.
Data Source - © Copyright 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. - Default Risk: The issuers of certain bonds could become unwilling or unable to make payments on their bonds.
- Derivatives Risk: Derivatives can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset.
- Emerging Markets Risk: Emerging markets are less established, and often more volatile, than developed markets and involve higher risks, particularly market, liquidity and currency risks.
- Exchange Rate Risk: Changes in currency exchange rates could reduce or increase investment gains or investment losses, in some cases significantly.
- Interest Rate Risk: When interest rates rise, bond values generally fall. This risk is generally greater the longer the maturity of a bond investment and the higher its credit quality.
- Investment fund risk: Investing in other funds involves certain risks an investor would not face if investing in markets directly. Governance of underlying assets can be the responsibility of third-party managers.
- Investment Leverage Risk: Investment Leverage occurs when the economic exposure is greater than the amount invested, such as when derivatives are used. A Fund that employs leverage may experience greater gains and/or losses due to the amplification effect from a movement in the price of the reference source.
- Liquidity Risk: Liquidity Risk is the risk that a Fund may encounter difficulties meeting its obligations in respect of financial liabilities that are settled by delivering cash or other financial assets, thereby compromising existing or remaining investors.
- Operational Risk: Operational risks may subject the Fund to errors affecting transactions, valuation, accounting, and financial reporting, among other things.