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Frontier Markets

Driven by multi-generational mega trends

Getting to know opportunities that Frontier Markets bring

Frontier Markets are undergoing structural positive changes and embarking on reform programmes, resulting in better economic prospects in the near- and medium-term future. Watch the video to learn more about HSBC's Frontier Markets strategy, and the benefit it brings to investors.
Despite including some of the world's most populous and fastest growing economies, Frontier Markets remain relatively under-researched, undervalued, and under-owned.
Ramzi Sidani, CFA, Senior Fund Manager

Why Frontier Markets?

  • Demographics
    Young, large and growing populations provide a ‘demographic dividend’
  • Supply chain diversification
    In light of the concentration risk lessons of the Covid pandemic and as labour costs rise in China, manufacturing hubs are moving to Frontier countries so supply chains can be closer to end-market
  • Liberalisation
    Social reforms in several Frontier geographies are helping to diversify and liberalise economies resulting in stronger and more stable economic growth
  • Digitisation
    Rising disposable incomes are increasing technology penetration which should drive productivity improvements

Why now?

Attractive valuations

Attractive valuations
Frontier Markets trade at attractive valuation levels with higher earnings growth and higher dividend yields than emerging market peers
Lower volatility

Lower volatility
Low intra-country correlations contribute to lower volatility than emerging and developed markets

Diversification

Diversification
Low correlation with other asset classes offers the potential for diversification benefits

Key Risks

The fund has a Summary Risk Indicator (SRI) of 4 on a scale from 1 (lowest risk) to 7 (highest risk). The SRI is based on historical data and may change over time. A lower risk rating does not mean a risk-free investment.

The value of investments and any income from them can go down as well as up, and investors may not get back the amount originally invested. The fund is exposed to a number of specific risks, including but not limited to:

  • Frontier and emerging markets risk: These markets tend to be less established and more volatile, with increased exposure to liquidity, market and political risks
  • Exchange rate risk: Currency fluctuations can significantly impact investment performance
  • Counterparty risk: The risk that a counterparty may fail to meet its contractual obligations
  • Derivatives risk: Derivatives may behave unpredictably and differ from their underlying assets in terms of pricing and volatility
  • Leverage risk: The use of leverage may magnify both gains and losses
  • Liquidity risk: Some investments may be difficult to buy or sell under certain market conditions
  • Operational risk: Errors in transaction processing, accounting, and fund administration may adversely affect performance
  • Sustainability risk: Environmental, social or governance events may negatively impact the value of an investment
Please read the Key Information Document (KID) and/or the Prospectus or Offering Memorandum for a complete list of risks before making an investment decision.

 

Important Information

This material/presentation/document is exclusively intended for professional investors as defined in Article 4(3)(a-g) of the Swiss Financial Services Act (FinSA, FIDLEG).

It is not intended for:

  • Professional clients who are not institutional clients under Article 4(4) FinSA and who wish to opt-in for treatment as retail clients under Article 5(5) FinSA Or
  • High-net-worth (HNW) retail clients and private investment structures created for them, who may declare themselves as professional investors (opting out)

There are further possibilities for opting-in and opting-out under FinSA. For details, please refer to our website: https://www.assetmanagement.hsbc.ch/. If you wish to change your client categorization, please inform us.

Regulatory and Documentation Notice

For HSBC GIF sub-funds that are authorized for offering in Switzerland, please refer to the list of collective investment schemes authorized for offering in Switzerland under Article 120 of the Federal Act on Collective Investment Schemes (CISA, KAG), as published by FINMA under Approved Institutes, People, and Products.

Potential investors are kindly requested to consult the latest:

  • Key Information Document (KID),
  • Prospectus,
  • Articles of Incorporation,
  • (Semi-)Annual Report of the Fund

These documents can be obtained free of charge at the head office of the representative:

  • HSBC Global Asset Management (Switzerland) AG, Gartenstrasse 26, P.O. Box, CH-8002 Zurich
  • Paying Agent: HSBC Private Bank (Suisse) S.A., Quai des Bergues 9-17, P. O. Box 2888, CH-1211 Geneva

Risk Factors and Investment Warnings:

  1. Investors and potential investors must read and acknowledge the risk warnings in the Prospectus and KID. Before subscribing, investors should refer to: the Prospectus for general risk factors, the KID for specific risk factors associated with the fund
  2. Past performance is not indicative of future results. Future returns may vary significantly
  3. Performance data does not include issue and redemption costs or commissions, which may affect actual returns
  4. The presented fund is a sub-fund of Z GIF, an investment company constituted as a Société d'Investissement à Capital Variable (SICAV) domiciled in Luxembourg
  5. The shares in HSBC GIF have not been and will not be registered under the US Securities Act of 1933. They may not be sold or offered in the United States, its territories, possessions, or areas under its jurisdiction, nor to US persons

The fund presented in this document is a sub-fund of HSBC Global Investment Funds, an investment company constituted as a société à capital variable domiciled in Luxemburg. The shares in HSBC Global Investment Funds have not been and will not be registered under the US Securities Act of 1933 and will not be sold or offered in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or to United States Persons.

Past performance is no indication to future results of a fund. The performance data do not take account of the commissions and costs incurred on the issue and redemption of units.

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