Global Credit

Our philosophy

Our global credit strategies invest in bonds of companies with stable or improving businesses.

• The main driver of our fund performance is the careful selection of the companies that issue bonds and of the bonds themselves
• We use a regional approach: we break down the investment universe into US, Europe and Emerging Markets to capture global opportunities and to be more diversified

HSBC strengths

• Many of our global credit strategies use customised benchmarks targeting more attractive returns for a given level of risk
• We have created dedicated research tools that are critical to our investment decisions
• Our team of over 40 sector specialists who cover the global credit universe is not replicable by many firms

Global High Income Bond Strategy

Aims to generate attractive risk-adjusted returns and steady income. We do this by investing in the “crossover” space - the corporate bonds that are between the ones with the best and worst credit ratings.

Our philosophy

• We believe bonds in the crossover space present opportunities because technical factors and market overreactions often lead to mispricing. To put it simply, with careful research, we can find bonds that may be undervalued
• Many professional investors are only allowed to invest in specific types of bonds: either investment-grade (highest-rated) bonds or high-yield (lowest-rated) bonds. As a bond changes categories, managers are forced to sell. This creates opportunities for managers who can hold bonds that are in transition

HSBC strengths

• By investing the crossover space, we can mix high yield bonds, which deliver more yield, and investment grade bonds, which have a lower risk. This allows us to balance the funds between yield and risk
• Our expert analysts focus on specific bonds rather than credit ratings, allowing us to get in-depth knowledge of each bond, and to follow them over time, whatever category they move to

Global High Yield Bond Strategy

The strategy focuses on high-yield opportunities in the US, Europe and Emerging Markets. These are corporate bonds with the lower credit ratings, so they are more risky, but can pay a higher yield.

Our philosophy

• The performance of our global high-yield bond strategy rests on our careful approach to risk, the knowledge of our local teams and our global research expertise
• Diversification is always a key consideration

Why this strategy?

• It invests in high-yield corporate bonds with the highest ratings in the category. We can also sometimes invest in investment-grade bonds, or in lower-rated high-yield bonds, if we see a specific opportunity
• The strategy allocates assets across the US, Europe and Emerging Markets for diversification and to capture global opportunities

HSBC strengths

The geographic reach and local insights of our global credit platform support the investment team in sifting through the broad investment universe