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A Record Year for HSBC Emerging Markets funds

26 February 2014

NEW YORK - HSBC Global Asset Management (HSBC) last year attracted a record US$575 million from investors into its U.S. lineup of Emerging Markets funds, bucking an industry trend that saw significant outflows of cash from emerging market equity and fixed income products.

2013 will be remembered by many as a period of significant bond fund capital outflows (US$86 billion), beating by some margin the previous high of US$62 billion in outflows recorded in 1994 during one of the worst bond markets in a generation. Despite the downturn in investor sentiment, HSBC's Total Return Fund achieved inflows of over US$290 million of net new money over the 12 month period: the third highest in its class.

Relative investment performance was strong across much of HSBC's emerging markets fund range in the U.S. in 2013, according to data from Morningstar, Inc.1 The HSBC Frontier Markets Fund (HSFIX) was the 2nd best performing fund in the US Diversified Emerging Markets category out of 147 Mutual Funds.2 The HSBC RMB Fixed Income Fund (HRMRX) and the HSBC Total Return Fund (HTRIX) were the 1st and 6th best performing funds respectively in the Emerging Market Bond category which includes 69 mutual funds.3

HSBC Global Asset Management is a leader in emerging markets with some US$146 billion in emerging markets assets under management globally (as at 31 December, 2013).

Damion Hendrickson, Head of Intermediary Distribution, HSBC Global Asset Management (USA) Inc., said, ""The experienced and dedicated emerging market debt team here at HSBC in New York collaborates with our investment professionals located in emerging market countries around the world. These global and local resources work closely together to focus on the range of available emerging market fixed income securities and are well equipped to evaluate and exploit fast developing opportunities."

The HSBC Total Return Fund and HSBC Frontier Markets Fund are available in the U.S. to both retail and institutional investors and trade in class A, I and S shares. The minimum investment for share class A is US$1,000. For further information, please go to www.emfunds.us.hsbc.com.

Investment, Annuity and Insurance Products:
ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT FDIC INSURED ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE VALUE

All decisions regarding the tax implications of your investment(s) should be made in connection with your independent tax advisor.

Notes to editors:

1 Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. For more information see: http://www.morningstar.com/

2 Source: Morningstar, Inc. Data as at December 31, 2013. The information referenced relates to the HSBC Frontier Markets Fund (HSFIX) Class I and other institutional share class funds in the Diversified Emerging Markets category. Performance data relates to 1 year total return (net of fees). Past performance is no guarantee of future results. Performance for other share classes will vary.

3 Source: Morningstar, Inc. Data as at December 31, 2013. The information referenced relates to the HSBC RMB Fixed Income Fund (HRMRX) and the HSBC Total Return Fund (HTRIX) Class I and other institutional share class funds in the Emerging Market Debt category. Performance data relates to 1 year total return (net of fees). Past performance is no guarantee of future results. Performance for other share classes will vary.

HSBC Global Asset Management, the investment management business of the HSBC Group, serves HSBC's worldwide customer base of retail and private clients, intermediaries, corporates and institutions invested in both segregated accounts and pooled funds. HSBC Global Asset Management fulfils its purpose of connecting HSBC's clients with investment opportunities around the world through an international network of offices in approximately 30 countries, delivering global capabilities with local market insight. As at 31 December 2013, HSBC Global Asset Management manages assets totaling US$428bn on behalf of its clients. For more information see www.global.assetmanagement.hsbc.com

HSBC Bank USA National Association (HSBC Bank USA, N.A.), with total assets of US$179.9 billion as of 30 September 2013 (US GAAP), serves 3 million customers through retail banking and wealth management, commercial banking, private banking, asset management, and global banking and markets segments. It operates more than 240 bank branches throughout the United States. There are over 155 in New York State as well as branches in: California; Connecticut; Delaware; Washington, D.C.; Florida; Maryland; New Jersey; Pennsylvania; Oregon; Virginia; and Washington State. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., an indirect, wholly-owned subsidiary of HSBC North America Holdings Inc. HSBC Bank USA, N.A. is a member of the FDIC.

Investment Risks:

Investments in foreign markets entail special risks such as currency, political, economic, and market risks. The risks of investing in emerging-market countries are greater than the risks generally associated with foreign investments. Frontier market countries generally have smaller economies and even less developed capital markets or legal and political systems than traditional emerging market countries. As a result, the risks of investing in emerging market countries are magnified in frontier market countries. Equity securities' value can fluctuate based on changes in a company's financial condition or overall market conditions. Fixed income securities are subject to credit and interest-rate risk. Credit risk refers to the ability of an issuer to make timely payments of interest and principal. Interest-rate risk refers to fluctuations in the value of a fixed-income security resulting from changes in the general level of interest rates. In a declining interest-rate environment, the portfolio may generate less income. In a rising interest-rate environment, bond prices may fall. Investments in high-yield securities (commonly referred to as "junk bonds") are often considered speculative investments and have significantly higher credit risk than investment-grade securities. The prices of high-yield securities, which may be less liquid than higher rated securities, may be more vulnerable to adverse market, economic or political conditions. Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund's original investment. RMB-denominated debt instruments may expose the fund to risks associated with mainland China, even though Hong Kong has a separate political and legal system, which includes currency risk, political and economic risk. It is difficult for investors located outside of China to directly access debt instruments. As a result, the portfolio may be impacted by the availability, liquidity, and pricing of investments designed to provide investors with exposure to Chinese markets and RMB. Convertible securities entail risks associated with equity securities (value can fluctuate based on changes in a company's financial condition or overall market conditions), investments in convertible securities are subject to the risks associated with fixed-income securities. Exchange-Traded Funds (ETF) are subject to the risks of the underlying securities (including market risks which could result in loss of principal) the ETF is designed to track, although lack of liquidity in an ETF could result in it being more volatile than the underlying portfolio of securities. ETFs also have management fees that increase their costs versus owning the underlying securities directly. Non-diversified funds focus investments in a small number of issuers, industries, foreign currencies or particular countries or regions which increase the risks associated with a single economic, political or regulatory occurrence.

HSBC Global Asset Management is the marketing name for the asset management businesses of HSBC Holdings Plc.

HSBC Global Asset Management (USA) Inc. serves as the investment adviser to the HSBC Funds. Foreside Distribution Services, L.P., member FINRA, is the distributor of the HSBC Funds and is not affiliated with the Advisor. HSBC Securities (USA) Inc., member NYSE, FINRA, SIPC is a sub-distributor of the HSBC Funds. Affiliates of HSBC Global Asset Management (USA) Inc. receive fees for providing various services to the funds.

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. To obtain more information, please call 1-888-936-4722 or visit www.emfunds.us.hsbc.com. Investors should read the prospectus carefully before investing or sending money.

Copyright © 2014. HSBC Global Asset Management (USA) Inc.

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†† Investments, Annuity and Insurance Products:
ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT FDIC INSURED ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE VALUE
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