HSBC Asset Management has launched the HSBC Sterling Short Duration Optimal Income Bond fund.
The sterling-denominated bond strategy is being run by portfolio manager Mohamed Siddeeq. It is focused on capital preservation and liquidity, while aiming to help investors meet income objectives.
The fund follows a multi-sector, short-duration credit approach, allocating across investment-grade corporates, securitised credit, emerging markets and high-yield to access differentiated sources of return, with target duration of approximately one-to-three years.
The firm considers the fund ‘a step beyond cash and money market funds,’ for investors seeking additional yield while maintaining short-duration profile and liquidity.
The fund will be available to wholesale and institutional investors based in the UK, and marks HSBC AM’s first active fixed income OEIC launch since 2017.
Siddeeq said: “In a market where cash rates are no longer the full story, we see a clear opportunity in short-duration, multi-sector credit which we believe is a space that can help investors seek more income while keeping interest-rate sensitivity tightly managed.
“For investors looking to enhance money market or cash returns without taking unnecessary duration risk, this fund could offer a practical next step.
“With access to a global opportunity set, it aims to deliver a competitive yield and attractive risk-adjusted returns through a diversified, multi-sector short-duration approach, supported by our longstanding fixed income expertise and focus on capital preservation and liquidity aware portfolio construction.”
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Dan Rudd, chief executive, UK, and head of UK wholesale, added: “As investors are increasingly looking for more duration and maturity than cash, we are pleased to launch this new strategy which builds on our established liquidity capabilities while offering investors the potential for enhanced yield and expands our offering in the short-term fixed income space.
“The OEIC structure provides a straightforward way to access a sterling-denominated strategy and reflects the increasing preference among institutional and wholesale investors to use pooled funds rather than more complex segregated mandates.”
