New HSBC funds will target high-yield, higher-yielding fixed income

By Toni Weeks

San Luis Obispo, Calif., April 24 – HSBC Funds gave details for its two new global bond funds in an N-1A filing with the Securities and Exchange Commission.

The HSBC Global High Yield Bond Fund will seek to maximize total return comprised of capital appreciation and income. Under normal market conditions, it will invest at least 80% of its net assets in a globally diversified portfolio of high-yield securities, primarily denominated in U.S. dollars or in a foreign currency hedged into U.S. dollars. The fund expects to maintain an average portfolio duration that varies within one year (plus or minus) of the duration of the BofA Merrill Lynch Global High Yield BB-B Constrained Index (USD Hedged), which as of March 31 was 3.86 years.

Mary Bowers, Rick Liu, Philippe Igigabel, Lisa Chua and Andrew Jackson are the portfolio managers. The lead portfolio manager may utilize the capabilities of subadviser HSBC Global Asset Management (France).

The fund offers class A and class I shares. The ticker symbols are “HBYAX” and “HBYIX,” respectively.

The HSBC Global High Income Bond Fund will seek to provide a high level of current income. Under normal market conditions, it will invest at least 80% of its net assets in a globally diversified portfolio of higher-yielding securities, which are those rated in the lowest investment-grade category or lower. The fund invests in at least three countries, including the United States, and may invest in the securities of issuers in emerging market countries. As with the previous fund, it primarily invests in U.S. dollar-denominated fixed-income securities or those denominated in a foreign currency that are hedged into U.S. dollars.

Jerry Samet, Jean-Olivier Neyrat, Chua, Jackson and Liu will be the portfolio managers for the second fund.

With this fund, the lead portfolio manager may utilize the capabilities of subadvisers HSBC Global Asset Management (France) or HSBC Global Asset Management (UK) Ltd.

The fund expects to maintain an average portfolio duration that varies within 1.5 years (plus or minus) of the duration of the Barclays High Income Bond Composite index, which as of March 31 was 5.64 years.

The fund offers class A and class I shares. The ticker symbols are “HBIAX” and “HBIIX,” respectively.

For both funds, class A shares will be subject to a maximum sales load of 4.75%. Including management fees of 0.65%, and taking into account a fee waiver and expense reimbursement agreement with the investment adviser, total annual fund operating expenses are expected to be 1.15% for class A and 0.8% for class I shares.

New York-based HSBC Global Asset Management (USA) Inc. is the funds’ investment adviser.

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