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Emerging Market Debt Total Return

HSBC’s Global Emerging Market Debt (EMD) Total Return strategies seek to capture as much upside of the entire EMD asset class as possible, while limiting volatility and drawdowns. Through a diversified blend of EMD assets, the strategy aims to calibrate both beta and duration management at the portfolio level, with rigorous country, issuer and currency selection at the security level.

Emerging Market Debt Total Return

HSBC’s Global Emerging Market Debt (EMD) Total Return strategies seek to capture as much upside of the entire EMD asset class as possible, while limiting volatility and drawdowns. Through a diversified blend of EMD assets, the strategy aims to calibrate both beta and duration management at the portfolio level, with rigorous country, issuer and currency selection at the security level.

Emerging Market Debt Total Return

HSBC’s Global Emerging Market Debt (EMD) Total Return strategies seek to capture as much upside of the entire EMD asset class as possible, while limiting volatility and drawdowns. Through a diversified blend of EMD assets, the strategy aims to calibrate both beta and duration management at the portfolio level, with rigorous country, issuer and currency selection at the security level.

Emerging Market Debt Total Return

HSBC’s Global Emerging Market Debt (EMD) Total Return strategies seek to capture as much upside of the entire EMD asset class as possible, while limiting volatility and drawdowns. Through a diversified blend of EMD assets, the strategy aims to calibrate both beta and duration management at the portfolio level, with rigorous country, issuer and currency selection at the security level.

Our total return strategies have the flexibility to tactically optimize long and short exposures to EMD assets.

Our philosophy

Our EMD total return strategies use an opportunistic approach to invest selectively (using long and short positions) across all EMD segments. They seek to provide superior risk-adjusted total returns with a focus on capturing maximum upside potential while minimizing volatility and drawdowns.

  • Flexible asset allocation decisions across EM hard currency and local debt assets serve as a key performance driver for the total return strategies. The strategies exploit inefficiencies in the EMD asset class and can express short-, medium- and long-term views independent of a benchmark
  • We use robust risk management tools to stress-test our portfolios under various scenarios and we continuously calibrate and optimize our portfolio positioning

Our process

Portfolio management decisions incorporate the expertise and analysis of a large, dedicated team of EMD specialists, credit analysts and economists. The process is collaborative and dynamic: specialists are each responsible and accountable for numerous investment inputs and decisions.

  • We integrate macroeconomic views, themes and catalysts with detailed country/currency fundamentals and relative valuation analysis. We also analyze market pricing action, yield curves and spreads to help us determine our investment entry points
  • A robust and reiterative risk management framework allows us to calibrate and optimize our positions and exposures using stress-testing and scenario-based analytics

HSBC Asset Management strengths

Emerging markets are part of our corporate DNA and we have one of the longest track records in the EMD universe, dating back to 1998

  • A global investment platform allows us to leverage the insights and local knowledge of our on-the-ground network of analysts and investment professionals from across the world
  • EMD capabilities range from US dollar-denominated sovereign, quasi-sovereign and corporate bonds to local currency-denominated debt and local FX. We offer both benchmarked and total return strategies in this space.

Risks in consideration

There is no assurance that a portfolio will achieve its investment objective or will work under all market conditions. The value of investments may go down as well as up and you may not get back the amount originally invested. Portfolios may be subject to certain additional risks, which should be considered carefully along with their investment objectives and fees.

  • Fixed income is subject to credit and interest rate risk. Credit risk refers to the ability of an issuer to make timely payments of interest and principal. Interest rate risk refers to fluctuations in the value of a fixed income security that result from changes in the general level of interest rates. In a declining interest rate environment, a portfolio may generate less income. In a rising interest-rate environment, bond prices fall.
  • High Yield Investments in high yield securities (commonly referred to as “junk bonds”) are often considered speculative investments and have significantly higher credit risk than investment grade securities. The prices of high yield securities, which may be less liquid than higher rated securities, may be more volatile and more vulnerable to adverse market, economic or political conditions.
  • Foreign and emerging markets Investments in foreign markets involve risks such as currency rate fluctuations, potential differences in accounting and taxation policies, as well as possible political, economic, and market risks. These risks are heightened for investments in emerging markets which are also subject to greater illiquidity and volatility than developed foreign markets.
  • Derivative instruments Derivatives can be illiquid, may disproportionately increase losses and may have a potentially large negative impact on performance.