The fourth HSBC Global Asset Management [profile] emerging markets mutual fund just hit the shelves. Last week the New York City-based shop unveiled the HSBC Total Return Fund, which invests primarily in emerging markets debt.
Guillermo Osses, head of emerging markets debt portfolio management, leads the PM team for the new fund.
As of March 31, HSBC boasted $148.3 billion in emerging markets assets under management.
Company Press Release
HSBC launches Emerging Markets Focused Total Return Fund in the U.S.
23 May 2012
New York, NY - HSBC Global Asset Management (USA) Inc. today announced the addition of a new emerging markets focused open-end mutual fund for US investors. The HSBC Total Return Fund is the fourth emerging markets fund that HSBC has launched in the U.S. since April 2011, following the earlier launches of the HSBC Emerging Markets Debt Fund, HSBC Emerging Markets Local Debt Fund and the HSBC Frontier Markets Fund.
The objective of the HSBC Total Return Fund is to maximize total return, investing primarily in emerging markets debt, denominated in local emerging market or major developed market currencies and derivatives. The Fund may also invest up to 10 per cent of total fund assets in emerging market equities. Given the relatively low correlation that emerging markets debt currently has with most other asset classes, the Fund has the potential to provide investors with diversification benefits within their overall portfolios.1
The Emerging Markets Debt portfolio management team at HSBC is based in New York and has over two decades of experience managing emerging market fixed income portfolios for institutional clients around the world. The investment team is led by Guillermo Ossés, Head of Emerging Markets Debt Portfolio Management.
Osses said, "Monetary policy in most emerging market economies has come a long way over the last decade. In many of these markets sound economic policies and increasingly stable political regimes have helped strengthen investor confidence. Reflecting improving fundamentals, there has also been a steady rise in many emerging market credit ratings. As a result, we believe many investors could potentially benefit from a greater strategic allocation to this asset class."
The emerging markets fixed income universe has evolved over time and now includes a wide range of securities such as corporate bonds, local currency issuance and inflation-linked bonds. As the complexity of the asset class intensifies, HSBC Global Asset Management believes the need increases for dedicated and experienced resources to fully capture the opportunities available in this diverse marketplace.
Christian Deseglise, Head of Sales, Americas, HSBC Global Asset Management, said, "Our experienced and dedicated emerging market debt team in New York is supported by HSBC Global Asset Management's team of investment professionals located in emerging market countries around the world. Our global and local resources work together to focus on the entire range of available emerging market fixed income securities and are equipped to evaluate and exploit fast developing opportunities. Without dedicated resources and access to on-the-ground expertise, opportunities could otherwise easily slip below the investment radar."
HSBC Global Asset Management is at the forefront of emerging markets investing, with some US$148.3 billion in emerging markets assets under management (as at 31 March 2012). The HSBC Total Return Fund trades in A shares (HTRAX), I shares (HTRIX) and S shares (HTRSX). For more information, please go to www.emfunds.us.hsbc.com.
Note to editors
1 Diversification does not guarantee a profit or protect against a loss, and cannot eliminate the risk of fluctuating prices and uncertain returns.
HSBC Global Asset Management
HSBC Global Asset Management manages assets totaling US$429.4 billion, and is a leader in emerging markets strategies, with US$148.3 billion under management. Through its network of offices in approximately 30 countries, HSBC Global Asset Management invests worldwide for private clients, intermediaries, corporations and institutions, both in segregated accounts and pooled funds. (All figures as at 31 March 2012). For more information, see www.emfunds.us.hsbc.com.
HSBC Global Asset Management (USA) Inc. serves as investment adviser to the HSBC Funds and receives fees for such services. All sub-advisers receive fees for their services. Shares of the Funds are not deposits or obligations of, or guaranteed or endorsed by, the advisers or any of their affiliates. Shares of the Funds are not federally insured by the U.S. Government, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board or any other agency or state. Shares of the Funds are subject to investment risk including possible loss of principal invested. Foreside Distribution Services, L.P., member FINRA, the distributor, is not affiliated with the adviser.
HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,200 offices in over 80 countries and territories in Europe, the Asia-Pacific region, North and Latin America, the Middle East and Africa. With assets of US$2,556bn at 31 December 2011, HSBC is one of the world's largest banking and financial services organizations.
Investment risks
There are risks associated with investing in a fund that invests in securities of foreign countries, such as erratic market conditions, economic and political instabilities and fluctuations in currency exchanges.
Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer term issues and in environments of rising interest rates. Investments in the fund are subject to possible loss due to the financial failure of underlying securities and their inability to meet their client obligations.
Prices of securities in emerging markets can fluctuate more significantly than the prices of companies in more developed countries. Securities of emerging market issuers generally have more risk than securities issued by issuers in more developed markets. The less developed the country, the greater affect the risks may have in an investment, and as a result, an investment may exhibit a higher degree of volatility than either the general domestic securities market or the securities markets of developed foreign countries.
The global economic volatility may impact Emerging Markets Debt but we have seen this asset class proving its resilience several times including in the financial crisis in 2008. Emerging Markets Debt is not highly correlated to developed markets fixed income and can provide added diversification benefits.
The Funds may use derivatives in connection with its investment strategies to hedge and manage risk and to increase its return. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed each Fund's original investment.
NOT FDIC INSURED/NO BANK GUARANTEE/MAY LOSE VALUE Investors should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other important information about the investment company. For clients of HSBC Securities (USA) Inc., please call 1-888-525-5757 for more information. For other investors and prospective investors, please call the Funds directly at 1-800-782-8183 or visit our website at www.emfunds.us.hsbc.com. Investors should read the prospectus carefully before investing or sending money.
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