HSBC Corporate Bond Fund
Our philosophy
- Sterling Corporates is a global market strongly influenced by global themes rather than by local UK developments
- To take full advantage of the opportunities within this global market a global investment approach is better suited to deliver stronger and more consistent long term performance
- HSBC’s global research and investment resources provide a competitive advantage in identifying the risks and opportunities within Sterling Corporates
Our process
- Global platform: HSBC’s large and experienced global investment and global credit research platforms enable us to select the most attractive investment opportunities in this global universe
- In-depth credit analysis: our unrivalled Global Credit Research team with analysts located close to the companies they cover produce in-depth credit analysis and investment recommendations
- Strong and independent research coverage: our credit analysts cover the vast majority of companies in the Sterling Corporates universe avoiding the need to use any external non-proprietary research
- Adding value: focus on active individual credit selection within sterling corporates
- Low concentration: we avoid having large exposures to specific industry sectors or to other asset classes which typically carry a higher probability of loss
- Diversified approach: we combine a larger number of individual positions to add value consistently through the economic cycle
HSBC’s strengths
- The Sterling Corporates universe is very global with circa 50 per cent of the universe comprised by non-UK issuers. A large proportion of the UK issuers are multinational companies whose revenues and profitability depend more on global trends than UK local developments
- HSBC has developed a large and unrivalled Global Credit Research team comprising more than 45 credit analysts located across four continents
- These credit analysts are located close to the companies they cover. This gives us a better opportunity to find attractive investment opportunities and avoid high risk-low reward investments
- The depth of our team means that more than 90 per cent of the sterling corporate market is covered by our Credit Analysts; this allows us to make unbiased investment decisions based on proprietary in-depth research, rather than relying on third-party suppliers
- An investor looking to select a Sterling Corporate bond manager should choose a provider that has the research capability to properly select and monitor investments from the vast array of global companies that issue in the sterling corporate market
Key risks
- Counterparty Risk: The possibility that the counterparty to a transaction may be unwilling or unable to meet its obligations
- Credit Risk: A bond or money market security could lose value if the issuer’s financial health deteriorates
- 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
- 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 of this happening is generally greater the longer the maturity of a bond investment and the higher its credit quality
- 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 is a measure of how easily the Fund’s holdings can be quickly converted to cash. The value of the Fund’s holdings may be significantly impacted by liquidity risk during adverse market conditions
- Operational Risk: Operational errors may affect transactions, valuation, accounting
Important Information
HSBC Corporate Bond is a sub-fund of HSBC Investment Funds, an Open Ended Investment Company that is authorised in the UK by the Financial Conduct Authority. The Authorised Corporate Director and Investment Manager is HSBC Global Asset Management (UK) Limited. All applications are made on the basis of the HSBC Investment Funds prospectus, Key Investor Information Document (KIID), Supplementary Information Document (SID) and most recent annual and semi-annual report, which can be obtained upon request free of charge from HSBC Global Asset Management (UK) Limited, 8, Canada Square, Canary Wharf, London, E14 5HQ, UK, or the local distributors. Investors and potential investors should read and note the risk warnings in the prospectus and relevant KIID and additionally, in the case of retail clients, the information contained in the supporting SID.
The value of the underlying assets is strongly affected by interest rate fluctuations and by changes in the credit ratings of the underlying issuer of the assets. The sub-fund can invest in sub investment grade bonds, which may produce a higher level of income than investment grade bonds, but carry increased risk of default on repayment. The performance of bonds, gilts and other fixed interest securities tends to be less volatile than those of shares of companies (equities). However, there is a risk that both the relative yield and the capital value of these may be reduced if interest rates go up. Income offered by bonds often reflects, in part, the risk rating of the issuer. The underlying funds can invest in sub investment grade bonds, which may produce a higher level of income than investment grade bonds, but carry increased risk of default on repayment. This may affect the level of income the investor receives and/or the capital value of their investment. The level of yields is not guaranteed and may rise or fall in the future.
HSBC Corporate Bond is actively managed.
The fund may use derivatives for the purposes of efficient portfolio management i.e. to meet the investment objective of the Fund and it is not intended that their use will raise the overall risk profile of the Fund. Please note derivative instruments may involve a high degree of financial risk. These risks include the risk that a small movement in the price of an underlying security or benchmark may result in disproportionately large movement; unfavourable or favourable in the price of the derivative instrument; the risk of default by counterparty; and the risk that transactions may not be liquid.
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