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The views expressed above were held at the time of preparation and are subject to change without notice. Any forecast, projection or target where provided is indicative only and not guaranteed in any way. HSBC Asset Management accepts no liability for any failure to meet such forecast, projection or target.
During rate-hiking periods, cashflow/income received from the underlying assets is the main return driver for floating-rate securitised credit
Interest rates will likely fall in 2024 but remain high. This is a favourable scenario for securitised credit because not only can it continue to enjoy higher income, but also benefit from potential capital appreciation as credit spreads tighten
Securitised credit comprises non-traditional bonds which may offer attractive investment potential. It exhibits a lower correlation to traditional fixed income asset, providing diversification benefits to investment portfolios
With a robust investment process, the Fund invests in investment grade securities with current average credit rating at AA1 which helps mitigating credit risk. It was only down 3% in 2022 (calendar year performance) during the worst year for Fixed Income since 20111
The yield premium offered by securitised credit versus similarly rated corporate bonds allows the Fund to provide an appealing potential income stream. The latest annualised dividend yield is 6.73%2 (dividend is not guaranteed and may be paid out of capital)
Source: HSBC Asset Management, July 2024. For illustrative purpose only
1 Source: HSBC Asset Management, data as of end July 2024, refers to Class AM2. For the overall global fixed Income market (represented by Barclays Global Aggregate Bond Index), 2022 was the worst year in terms of calendar year performance since 2011. Calendar year performance of Class AM2: 4.62% (2024 YTD); 7.66% (2023); (-3.19%) 2022; (1.21%) 2021; 0.45% (2020); 4.04% (2019). Past performance does not predict future returns. The figures are calculated in the share class base currency, NAV to NAV basis with dividend reinvested, net of fees.
2 Source: HSBC Asset Management, as of end July 2024, refers to Class AM2. Dividend is not guaranteed and may be paid out of capital, which will result in capital erosion and reduction in net asset value. A positive distribution yield does not imply a positive return. Past distribution yields and payments do not represent future distribution yields and payments. Historical payments may be comprised of both distributed income and capital. The calculation method of annualised yield: ((1+ (dividend amount/ ex-dividend NAV))^12) – 1. The annualised dividend yield is calculated base on the dividend distribution on the relevant date with dividend reinvested and may be higher or lower than the actual annual dividend yield.
The Fund has won Platinum Award under Global Bond Category at Fund Selector Asia Fund Awards Hong Kong 20243
Its consistent outperformance is also demonstrated by its first-quartile ranking from 1-year to 4-year periods in its Morningstar category4
3 Source: FSA Fund Awards Hong Kong 2024, January 2024.
4 Source: Morningstar as of end April 2024. Peer group quartile rankings measure the fund’s total return performance during the respective period against other funds under Morningstar EAA OE Other Bond category, with 1st quartile as the highest ranking and the 4th quartile the lowest ranking.
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The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Past performance is not a reliable indicator of future performance. Any views and opinions expressed are subject to change without notice. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. We accept no liability for any failure to meet such forecast, projection or target. This page is prepared for general information purposes only and does not have any regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. Any views and opinions expressed are subject to change without notice. This document does not constitute an offering document and should not be construed as a recommendation, an offer to sell or the solicitation of an offer to purchase or subscribe to any investment.
