HSBC Global Asset Management (“HSBC”) announced the launch of HSBC Global Investment Funds – Global Corporate Fixed Term Bond 2022 (“the Fund”) to retail investors in Singapore. The Fund aims to provide clients with a potential monthly income1 through its distribution share class over the course of its 2.5 years tenor, achieved through broadly diversified investments in developed and emerging markets. It also aims to return the Fund’s net asset upon maturity.
The Fund aims to generate monthly dividend (certain classes target a relatively stable dividend income)1 and return net assets upon maturity2. It is broadly diversified across investment grade and high yield bonds in developed markets and emerging markets, with a maximum of 30% of its assets to be invested in non-investment grade bonds to achieve an average rating of BBB-. A robust default analysis process is in place to monitor the underlying securities and ensure credit risk is managed. Besides North America and Europe, the Fund has a considerable weighting in Asia in terms of asset allocation.
A fixed term bond fund combines the benefits of single bond investments and bond funds. Both fixed term bond funds and single bonds have pre-defined maturity dates, and therefore are potentially less subject to daily price fluctuations and interest rate risk. Just like traditional bond funds, the Fund is professionally managed by an investment team and has a lower minimum subscription threshold than individual bonds.
Subscription for the Fund starts on 12 June for Singapore retail investors. The initial public offering will end on 25 June and the Fund will begin trading on the same day. With a base currency in USD, the Fund also offers share classes in SGD, RMB and AUD. The investement threshold is USD1,000, SGD1,000, RMB5,000 and AUD1,000. For investors who wish to redeem the fund prior to the maturity date, swing pricing will apply at up to 2% of the redemption amount to protect existing investors against transaction costs.
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