HSBC Asset Management (HSBC AM) has launched a credit income fund which will invest in a mix of traditional fixed income and alternative credit investments, open to retail investors in Hong Kong.
The HSBC Global Funds ICAV – Credit Income Advance fund will invest across securitised credit, listed private credit and broadly syndicated loans (BSLs) in the alternatives space, and in investment grade bonds, non-investment grade bonds and emerging market debt in the traditional fixed income space.
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The fund launched on 15 December, with a 47.5 per cent allocation to alternatives, comprising 27.5 per cent in private credit and loans, and 20 per cent in securitised credit.
According to official documents, the fund will participate in the private credit market through listed business development companies and will gain indirect exposure to the performance of BSLs through the use of total return swaps.
HSBC AM said that, with longer-term interest rates in Western markets expected to remain elevated due to persistent inflation uncertainty and concerns over government debt sustainability, this “may create opportunities for higher yields across both traditional and alternative credit markets”.
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With a targeted duration range of around two to 3.5 years, the portfolio “is designed to remain agile in shifting economic landscapes” and aims to generate fixed monthly payouts of eight per cent.
The fund will be managed by Ricky Liu, senior portfolio manager for global and US credit at HSBC AM, according to reports.
“By integrating private credit and securitised assets alongside traditional bonds, this multi-layer investment strategy allows us to access specialised sources of income that are less correlated to public markets,” Liu told Fund Selector Asia.
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