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HSBC Global AM launches emerging market debt funds

HSBC Global Asset Management has launched separate Asian and Latin American debt funds.


The HSBC GIF Latin American Local Debt Fund will be managed by Octavio Ferreira, manager of the HSBC GIF Brazil Bond Fund. He will invest in investment and non-investment grade securities issued by governments and companies in Latin America and will run it as a concentrated portfolio of between 20 and 50 holdings.

Ferreira and his team are based in Brazil with local research teams in Brazil as well as Mexico, Argentina and Colombia.

It is benchmarked against the JPM GBI EM Global Latin America index, which is heavily weighted to Brazil (55%) and Mexico (35%) with the balance in Colombia (7%) and Peru (3%).

The HSBC GIF Asian Currencies Bond Fund invests in Asian investment grade and non-investment grade securities, both sovereigns and corporate, that are denominated in Asian currencies as well as the US dollar.

The fund’s bespoke benchmark is the Markit iBoxx ABF Pan Asian ex China and Hong Kong index and will be managed against it by Cecilia Chan, chief investment officer of fixed income, Asia-Pacific and Alfred Mui, investment director of fixed income, from the firm’s Hong Kong office.

Chan said: “The market for emerging East Asian currency debt was valued at $4.6tron during the first quarter of 2010 and grew at an annual rate of 17%. Allocations to Asian local currency debt has increased this year as investors seek higher yields than those available in the US and Europe, where interest rates are at record lows.”

The AMC for both funds 0.625% for institutional and 1.25% for retail shares, with an expected TER of 0.875% for the former and 1.60% for the retail share class. The minimum investment is $1m and $5,000 respectively.

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