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HSBC Global Emerging Markets Bond

HSBC’s Global Emerging Markets Bond strategies invest predominantly in EM sovereign and quasi-sovereign bonds denominated in USD. The strategies can also include some off-benchmark exposure to corporates and local currencies to control volatility and maximize risk-adjusted returns.

HSBC Global Emerging Markets Bond

HSBC’s Global Emerging Markets Bond strategies invest predominantly in EM sovereign and quasi-sovereign bonds denominated in USD. The strategies can also include some off-benchmark exposure to corporates and local currencies to control volatility and maximize risk-adjusted returns.

HSBC Global Emerging Markets Bond

HSBC’s Global Emerging Markets Bond strategies invest predominantly in EM sovereign and quasi-sovereign bonds denominated in USD. The strategies can also include some off-benchmark exposure to corporates and local currencies to control volatility and maximize risk-adjusted returns.

HSBC Global Emerging Markets Bond

HSBC’s Global Emerging Markets Bond strategies invest predominantly in EM sovereign and quasi-sovereign bonds denominated in USD. The strategies can also include some off-benchmark exposure to corporates and local currencies to control volatility and maximize risk-adjusted returns.

The market standard benchmarks for external, or hard currency, EM debt is the JP Morgan Emerging Markets Bond Index – Global (the EMBI-Global or the EMBI-Global Diversified) which covers 67 countries and consists of regularly traded, liquid government bonds.

Our Philosophy

Our Global Emerging Markets Bond strategies aim to capture growth potential in external EM debt while managing volatility. Although they invest primarily in EM sovereign and quasi-sovereign bonds that have been issued in USD, our EMD hard currency strategies may include some off-benchmark positions in EM corporates, EM local debt and EM currencies for diversification potential.

  • Exhaustive analysis of EM country and issuer fundamentals and valuations are critical inputs for our investment decisions. This analysis is evaluated within current economic, financial and market contexts to determine overall portfolio risk positioning.
  • We use a robust risk management framework through which we stress-test our investment ideas under various scenarios, continuously calibrating and optimizing our portfolio exposures

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. Our initial investment positions are then modeled and calibrated via stress-testing and scenario analysis to create a resilient and diversified portfolio.

  • We evaluate all EM country fundamentals, reviewing their economic situation (growth, debt, trade balances, fiscal discipline, inflation, etc.) along with more subjective factors (governance, politics, history of default, etc.) as well as current market technicals
  • We use robust risk management tools to stress-test our investment ideas with enhanced scenario analysis. We also continuously calibrate the size and scale of our positions to optimize the portfolio

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

For more information or to discuss your investment strategy, contact us.

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.