HSBC GIF – HSBC Global High Income Bond Fund
Q1 2017
The Fund has diversified exposure in the US, Europe and emerging markets, managed by specialists sleeves managers. This diversified and actively managed exposure is key to unlocking value in the current low interest rate environment
Focus on credit management2
Important information:• The Fund invests mainly in higher yielding bonds, including non-investment grade bonds.• For certain classes of the Fund, the Fund may pay dividends out of capital or pay dividends gross of expenses. Investors should note that the payment
of dividends out of capital or effectively out of capital represents a return or withdrawal of part of the amount they originally invested or from any capital gains attributable to the original investment. Such distributions may result in an immediate decrease in the net asset value of the Fund.
• The Fund may invest in financial derivative instruments for investment purpose and may suffer substantial loss if the relevant issuers default or the relevant instruments cannot be realised or perform badly.
• The Fund may have exposure to emerging markets, non-investment grade bonds, mortgage backed securities and asset backed securities which are subject to higher risks and volatility.
• The Fund’s investments may involve substantial credit/counterparty, market, currency, volatility, liquidity, regulatory, downgrading and political risks. Investors may suffer substantial loss of their investments in the Fund.
• Unit trusts are NOT equivalent to time deposits. Investors should not invest in the Fund solely based on the information provided in this document and should read the offering document of the Fund for details. This document does not constitute an offering document.
The Fund was awarded the Lipper Award – Bond Global category over 3 years, across 3 countries in 2015 and Benchmark Fund of Year Awards in 20163
The awards demonstrate industry recognition of the Fund’s strong performance
Regular income potential4
The Fund has delivered regular monthly dividends since launch
Diversified exposure of the Fund (%)2
The Fund invests primarily in BBB and BB-rated bonds, and invests flexibly on an optimistic basis in other investment grade or B-rated bonds
All bonds are analysed by our dedicated global credit research teamCredit rating asset allocation of the Fund2
The dividend record (Class AM2)(Dividend is not guaranteed and may paid out of capital) 4
Month Dividend amount (USD) Annualised yield (%) 01/2016 0.0385 4.53 02/2016 0.0383 4.51 03/2016 0.0387 4.46 04/2016 0.0400 4.55 05/2016 0.0403 4.6106/2016 0.0398 4.5207/2016 0.0397 4.4308/2016 0.0398 4.4209/2016 0.0379 4.2110/2016 0.0375 4.2111/2016 0.0367 4.2212/2016 0.0353 4.04
BBB 40.2%
BB 26.4%
Cash 3.2%
B 8.5%
AAA 4.2%NR 4.9%
CCC 0.7%CC 0.1%
AA 1.0%
A 10.8%
1
Source: 1. Morningstar, Inc. All Rights Reserved. Morningstar RatingTM as of 31 December 2016. 2. HSBC Global Asset Management, data as of 31 December 2016. 3. HSBC Global Asset Management, data as of 31 December 2016. 4. HSBC Global Asset Management, data as of 31 December 2016. Dividend is not guaranteed and will result in reduction in net asset value. A positive distribution yield does not imply a positive return. The calculation method of annualised yield: (dividend value/ bid price as of ex-dividend date) x 12. The annualised dividend yield is calculated based on the dividend distribution on the relevant date with dividend reinvested, and may be higher or lower than the actual annual dividend yield. Dividend may be paid out of capital and will result in capital erosion. The performance and dividend yield of a Class may be affected by many factors such as, where applicable, exchange rate fluctuation, currency hedging costs and interest rate differentiation between different currencies. Therefore, different Classes may have different performance and dividend yield, and the performance and.
Source: 1. Morningstar, Inc. All Rights Reserved. Morningstar RatingTM as of 31 December 2016. 2. HSBC Global Asset Management, data as of 31 December 2016. 3. HSBC Global Asset Management, data as of 31 December 2016. 4. HSBC Global Asset Management, data as of 31 December 2016. Dividend is not guaranteed and will result in reduction in net asset value. A positive distribution yield does not imply a positive return. The calculation method of annualised yield: (dividend value/ bid price as of ex-dividend date) x 12. The annualised dividend yield is calculated based on the dividend distribution on the relevant date with dividend reinvested, and may be higher or lower than the actual annual dividend yield. Dividend may be paid out of capital and will result in capital erosion. The performance and dividend yield of a Class may be affected by many factors such as, where applicable, exchange rate fluctuation, currency hedging costs and interest rate differentiation between different currencies. Therefore, different Classes may have different performance and dividend yield, and the performance and.
Overall Morningstar RatingTM
United States 38.1%Others 32.9%
France 4.9%Mexico 3.8%
United Kingdom 3.7%Brazil 3.6%
Turkey 2.2%Germany 2.6%
Cayman Islands 2.7%China 2.8%
Netherlands 3.0%
Consistent outperformance with industry recognition
31 Active management to capture value1
Why invest?
www.assetmanagement.hsbc.com/hk
Investment objectiveThe Fund invests for high income primarily in a diversified portfolio of higher yielding fixed income bonds and other similar securities from around the world denominated in a range of currencies. This may include Investment Grade bonds, high yield bonds and Asian and Emerging Markets debt instruments.
Suitable investorsThe Fund is suitable for investors:
seek access to high income and regular dividend distribution and understand that dividends are not guaranteed
have positive views towards high income bond market
understand and are willing to accept the risks associated with bond investment
Potential risks Investment risk: there is no guarantee of the repayment of
principal. The Fund’s investment portfolio may fall in value and therefore your investment in the Fund may suffer losses.
Emerging market risk: emerging markets involves a higher risk including political, tax, economic, foreign exchange, liquidity, market volatility (such as interest rate and price volatility) and regulatory risks.
Interest rate risk: bonds are more susceptible to fluctuation in interest rates movement
Credit risk: when the issuer of a bond defaults, the Fund may suffer a loss amounting to the value of such investment. Investment grade bonds may be subject to the risk of being downgraded to non-investment grade bonds. Non-investment grade bonds are subject to higher credit risk and counterparty risk.
Liquidity risk: the market for non-investment grade and unrated securities may be less active. A lowering of the credit rating of a security or its issuer may affect the security’s liquidity, making it more difficult for the Fund to sell such security
Derivative instrument risk: include but are not limited to market volatility risk, credit risk, counterparty risk, liquidity risk, valuation risk and leverage risk. If the issuers of the derivative instruments default, or such securities or their underlying assets cannot be realized, or perform badly, investors may suffer substantial or, in certain cases, total loss of their investments
Issued by HSBC Global Asset Management (Hong Kong) Limited
Sector allocation
Asset allocation5
Fund details5
Fund size
Share class
Launch date
Minimum investment
Subscription fee
USD2.93321 billion
Class AC / Class AM2 / Class AM3HAUD / Class AM3HEUR
28 July 2010 (Class AC, AM2)4 September 2012 (Class AM3HAUD)13 September 2012 (Class AM3HEUR)
USD1,000 / HKD10,000 / AUD1,500 / EUR850
Up to 3% of offer price
Management fee
Switching fee
Fund manager
Reference performancebenchmark
1.25% per annum
1%
Jerry Samet
35% Barclays USD Emerging Markets,20% Barclays US Aggregate Corporate Baa,15% Barclays US High Yield Ba,15% Barclays Euro Aggregate Corporate Baa Hedged USD,15% Barclays Euro High Yield BB Hedged USD
Performance5
Cumulative performance in USD (%)
Calendar year performance in USD (%)
3mths 6mths 1 yr 3 yrs 5 yrs Since launch
The Fund (Class AM2) -1.9 1.3 6.6 10.9 33.1 41.4
Reference Performance -1.1 1.9 9.5 16.8 38.4 49.4Benchmark
2012 2013 2014 2015 2016 YTD
The Fund (Class AM2) 18.4 1.3 5.5 -1.4 6.6 6.6
Reference Performance 17.2 1.2 6.5 0.1 9.5 9.5Benchmark
Financial institutions 20.7%
Sovereign 11.7%
Agencies 8.2%
Communications 9.0%
Cmbs 4.9%
Treasuries 3.4%
Consumer cyclical 6.0%
Capital goods 3.9%
Consumer non cyclical 5.9%
Energy 5.5%
Basic industry 4.8%
Abs 5.0%
Utility 2.2%
Technology 1.7%CDS 2.0%
CMO 0.6%
Industrial other 0.6%Transportation 0.7%
Cash 3.2%
Source: 5. HSBC Global Asset Management, data as of 31 December 2016. Bid to Bid price with dividend reinvested. Fund changes that may have material impact on performance: 20 June 2016 – Investment objective revised.BLOOMBERGR is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). BARCLAYSR is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays is affiliated with HSBC Global Asset Management, and neither approves, endorses, reviews or recommends the fund. Neither Bloomberg nor Barclays guarantees the timeliness, accurateness or completeness of any data or information relating to 35% Barclays USD Emerging Markets + 20% Barclays US Aggregate Corporate Baa + 15% Barclays US High Yield Ba+ 15% Barclays Euro Aggregate Corporate Baa Hedged USD + 15% Barclays Euro High Yield BB Hedged USD (the “Index”), and neither shall be liable in any way to the HSBC Global Asset Management, investors in the fund or other third parties in respect of the use or accuracy of the Index or any data included therein.Investment involves risk. Past performance is not indicative of future performance. Please refer to the offering document for further details including the risk factors. The document has not been reviewed by the Securities and Futures Commission.The document is prepared for general information purposes only. All views expressed cannot be construed as an offer or recommendation by HSBC Global Asset Management (Hong Kong) Limited (“AMHK”). AMHK and HSBC Group shall not be held liable for damages arising out of any person’s reliance upon this information. Any person considering investment should seek independent advice on the suitability or otherwise of the particular investment.
Top 10 Holdings5
Securities Holdings (%)
Brazil (Fed Rep of)-Global 4.875% 22/01/21 0.6
US Treasury Notes 1.5% 15/08/26 0.5
Deutsche Telekom Int Fin 2.485% 19/09/23 0.5
Colombia (Rep of)-Global 4.375 12/07/21 0.4
Petrobras Intl Finance 5.375% 27/01/21 0.4
Siemens 2% 15/09/23 0.4
Hungary Republic of - Global 6.25% 29/01/20 0.4
Republic of Indonesia 4.875% 05/05/21 0.4
United Mexican States 3.6% 30/01/25 0.3
Danone (Groupe) 2.947% 02/11/26 0.3