HSBC launches high-yield fund

HSBC Global Asset Management has launched the GIF Global Short Duration High Yield Bond fund, which aims to produce high income whilst minimising interest-rate risk.

The fund is a Luxembourg-domiciled undertaking for collective investment in transferable securities (UCITS) and will be managed by Mary Bowers, who is part of HSBC's New York-based fixed income team.

Bowers is supported by specialist managers. The investment approach for the fund involves an active top-down management.

The portfolio will hold 70 to 100 high-yield bonds with final maturity or expected call dates within three years. The bonds will be selected from a core universe of US and European corporate, then rated an average of BB or BBB.

Bowers said, despite the current low-growth environment, US and eurozone high-yield corporate fundamentals generally remain healthy and high-yield defaults are relatively stable.

She added: "While the uncertainly over quantitative easing tapering may keep markets volatile, we believe that credit spreads can fall back, especially in BBB and high-yield areas of the market.

"Current volatility could provide an opportunity to reallocate risk by rotating between segments and regions and by increasing exposure selectively."

The minimum investment in the HSBC GIF Global Short Duration High Yield Bond fund is $5,000 (£3,137) for the wholesale share class, which carries an ongoing charge (including administration) of 1.15%.