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HSBC Launches Two Emerging Market Debt Funds in the U.S.
26 April 2011
The Funds Target Demand from Investors Looking for Emerging Market Exposure
New York, NY – HSBC Global Asset Management (USA) Inc. today announced it has launched two new emerging market debt open-end mutual funds (the Funds). The HSBC Emerging Markets Debt Fund invests primarily in U.S. dollar denominated fixed income instruments of emerging market issuers and the HSBC Emerging Markets Local Debt Fund invests primarily in fixed income instruments denominated in emerging market local currencies. The Funds seek to maximize total return and provide exposure to emerging market economies. The HSBC Emerging Markets Local Debt Fund, in addition, has the potential to benefit from exposure to local currency appreciation relative to the U.S. dollar.
The HSBC Emerging Markets Debt team, based in New York, has managed institutional portfolios around the world since 1987. The team is currently led by Guillermo Ossés, Head of Emerging Markets Debt Portfolio Management.
Ossés stated “The launch of the Funds meets the growing demand for foreign investments from individual investors who want to expand beyond U.S. fixed income products. With the structural improvements experienced by emerging market countries, investors willing to accept higher price and income fluctuations than those of traditional fixed income funds can potentially find greater returns and added diversification by incorporating these emerging market debt funds into their long-term investment portfolios.”
Since 1990, due to strong economic fundamentals and improving debt dynamics, emerging market countries have experienced credit upgrades for both corporate and government issuers. Today, over half of the emerging market universe is investment grade and emerging-market bonds have substantially outperformed developed-market bonds over the last 15 years.
Peter Marber, Emerging Markets Debt Business Strategist for the Americas, said, “HSBC has offered emerging market debt mutual funds overseas since 1998 and we are excited to now bring our expertise to the wider U.S. market.”
Emerging markets fixed income is a key investment strategy for HSBC Global Asset Management, which is considered to be one the largest emerging markets investment managers in the world, currently managing US$145 billion* in emerging market assets globally. Marber adds, “We have a global presence in the developed world and in the most dynamic emerging markets, which puts HSBC in the forefront as an Emerging Markets leader in terms of knowledge and expertise.”
The HSBC Emerging Markets Debt Fund trades in A shares (HCGAX), I shares (HCGIX) and S shares (HBESX). The HSBC Emerging Markets Local Debt Fund trades in A shares (HBMAX), I shares (HBMIX) and S shares (HBMSX).
Notes to editors:
HSBC Global Asset Management (USA) Inc.
HSBC Global Asset Management is a group of companies in many countries and territories throughout the world that are engaged in investment advisory and fund management activities, which are ultimately owned by HSBC Holdings plc. As of December 31, 2010, HSBC Global Asset Management (USA) Inc. managed/advised $63.4 billion, representing 14.3 % of all assets under management/advice by HSBC Global Asset Management. For more information, visit www.assetmanagement.hsbc.com
HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of $2,455 billion at 31 December 2010, HSBC is one of the world’s largest banking and financial services organizations. HSBC is marketed worldwide as “the world’s local bank.”
Notes to investors:
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.
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 (USA) Inc. serves as investment adviser to the HSBC Emerging Markets Debt and HSBC Emerging Markets Local Debt Funds and receives fees for such services.
Foreside Distribution Services, L.P., member FINRA, the distributor for these two funds, is not affiliated with the adviser.
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.investorfunds.us.hsbc.com. Investors should read the prospectus carefully before investing or sending money.
- Rob Sherman
- HSBC Public Affairs
* As at December 31, 2010
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