HSBC Asset Management (HSBC AM) has launched an actively-managed fund that invests in Asian bond issuers with solid ESG credentials.
The HSBC GIF Asia ESG Bond fund will aim to achieve a higher ESG score and lower carbon intensity score than its benchmark – the JPMorgan ESG Asia Credit Index.
Alfred Mui, managing director, head of Asia fixed income investment management, and Wilson Yip, associate director, fixed income at HSBC AM, will manage the fund.
The new fund will invest in Asian companies with strong ESG practices that result in fewer carbon emissions, including sustainable bonds, green bonds, sustainability-linked bonds, transition bonds and social bonds.
It will harness negative screening to exclude companies in harmful sectors, such as weapons, thermal coal, gambling and tobacco, as well as issuers that breach the UN Global Compact Principles.
The fund is categorised as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
"Last year, we saw Asia issue a record amount of green, social and sustainability-linked US dollar bonds, demonstrating that growth in the space is strong. As governments and companies across the region plan their paths to net zero, the demand for debt financing to support green projects will grow,” said Mui.
“This opens up an opportunity for global investors to take part in Asia's transformation through an ESG-enhanced Asian bond strategy, which also has a potential to offer higher yields versus other comparable markets. At the same time, investing in Asia ESG bonds does not come at the expense of performance, according to historical data.”
As of 30 September 2021, HSBC AM managed $19 billion in Asian credit. The firm has been managing Asian credit strategies since 1996.
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