Global Credit

Our philosophy

Our global credit strategies invest in securities with stable or improving fundamentals, focusing on mispriced risks.

• Issuer and bond selection are our main performance drivers
• We use a regional approach, breaking down the investment universe into US, Europe and emerging markets for enhanced diversification

Our process

We use our local credit management and credit research teams to determine issuer, regional, sector and credit allocations.

• Lead portfolio managers leverage the insights of local credit analysts and portfolio managers and actively allocate across regions (US, Europe and emerging markets)
• Identifying, pricing and combining risks is at the core of our investment approach

HSBC strengths

• Many of our global credit strategies use alternatively-weighted, customised benchmarks targeting more attractive risk-adjusted returns
• Proprietary fundamental and valuation research tools are critical to our investment decisions and our risk calibration techniques
• Over 45 sector specialists cover the global credit universe across investment grade, cross-over and high yield names

Global Corporate Bond Strategy

Aims to provide attractive risk-adjusted returns with broad exposure to global investment-grade corporate bonds.

Our philosophy

• Our risk-aware approach, local credit management and global credit research have been instrumental performance drivers
• Diversification is a key consideration in our benchmark and portfolio construction

Our process

• We have created a customised benchmark - the Bloomberg Barclays Global Aggregates Corporate Alternatively Weighted Scheme Index Hedged USD
• The benchmark includes mainly investment-grade corporate bonds denominated in USD, EUR and GBP, with exposure to bonds denominated in any given currency limited to below 50%
• Hedge to USD to mitigate volatility and provide returns that can then be hedged

HSBC strengths

• Our customised benchmark seeks to provide more attractive risk-adjusted returns over the medium-term than the traditional benchmark
• The geographic reach and local insights of our global credit platform support the investment team in sifting through the broad opportunity set

Global High Income Bond Strategy

Aims to generate attractive risk-adjusted returns and steady income by investing the crossover space - lower-rated investment-grade credit and higher quality high yield securities.

Our philosophy

• We believe bonds in the crossover space are inefficient as technical factors and market overreactions often lead to mispricing   
• Certain investors are limited to investment grade credit and others to high yield. As a bond changes categories, managers are forced to sell, creating opportunities for managers that can hold transitioning bonds

Our process

• We have developed a customised investment universe to expand the investment grade opportunity set globally to include higher rated high yield credit

HSBC strengths

• By investing the crossover space, we are able to target the yield potential of high yield bonds while maintaining an overall lower risk profile
• Our credit analysts focus on specific credits rather than ratings, allowing for continuity in coverage to provide the investment team with in-depth insights on the credit

Global High Yield Bond Strategy

The strategy focuses on high yield opportunities in the US, Europe and emerging markets. We also manage a US Short Duration High Yield Bond strategy, which aims to provide attractive returns with lower duration and volatility.

Our philosophy

• Our risk-aware approach, local credit management and global credit research have been instrumental performance drivers 
• Diversification is a key consideration in portfolio construction

Our process

• The strategy invests in high yield corporate bonds with the ability to invest in investment grade or lower rated high yield bonds opportunistically
• The lead fund manager allocates assets across US, Euro and emerging markets regions to capture different yield, quality, duration and volatility characteristics

HSBC strengths

• The geographic reach and local insights of our global credit platform support the investment team in sifting through the broad opportunity set