Changes in Investment Objective of R71 HSBC GEM Debt Total Return, J55 HSBC Chinese Equity and L14 HSBC Russia Equity
03 May 2018
Change in Investment Objective to the Underlying Funds of:
R71 HSBC GEM Debt Total Return
J55 HSBC Chinese Equity
L14 HSBC Russia Equity
We have been notified by HSBC Global Investment Funds (“The Company”) that the Underlying Fund of R71 HSBC GEM Debt Total Return will be subject to a change in the Investment Objective, effective from 28 May 2018 (the “Effective Date”).
The Investment Objective of the Underlying Fund R71 HSBC GEM Debt Total Return from the Effective Date shall read:
“The sub-fund invests for long term total return in a portfolio allocated across the full spectrum of Emerging Markets bonds and other similar securities or instruments.
The Total Return strategy aims to capture the majority of the upside in the Emerging Market debt universe while limiting the downside risk. The Total Return strategy has a flexible allocation across the full spectrum of Emerging Market debt assets. Returns are generated through duration management, yield curve positioning, currency positioning and the selection of individual securities within the investment universe. By seeking multiple sources of return, the Total Return strategy aims to provide over an investment cycle risk-adjusted returns above the investment universe of the sub-fund without reference to a benchmark index. However the Total Return strategy does not imply there is any protection of capital or guarantee of a positive return over time. The sub-fund is subject to market risks at any time.
The sub-fund invests in normal market conditions primarily in Investment Grade and Non-Investment Grade rated fixed income and other similar securities issued by companies which are domiciled in, based in or carry out the larger part of their business in Emerging Markets or which are issued or guaranteed by governments, government agencies, quasi-government entities, state sponsored enterprises, local or regional governments (such as state and provincial governmental entities and municipalities) and supranational bodies of Emerging Markets. The Investment Adviser may reduce the sub-fund’s exposure to the aforementioned assets at any time and invest up to 49% of the sub-fund’s net assets in cash, cash instruments and/or money market instruments which may be issued by governments in developed markets.
Investment in onshore Chinese fixed income securities include, but are not limited to, onshore fixed income securities denominated in RMB, issued within the People’s Republic of China ("PRC") and traded on the China Interbank Bond Market ("CIBM"). The sub-fund may invest in the CIBM either through Bond Connect and/or the CIBM Initiative. The sub-fund may invest up to 10% of its net assets in onshore Chinese bonds issued by, amongst other, municipal and local governments, companies and policy banks and onshore Chinese convertible bonds.
The sub-fund may invest up to 25% of its net assets in convertible bonds (excluding contingent convertible securities).
The sub-fund may invest up to 10% of its net assets in contingent convertible securities, however this is not expected to exceed 5%.
The sub-fund may invest up to 10% of its net assets in units or shares of UCITS and/or other Eligible UCIs (including other sub-funds of HSBC Global Investment Funds).
The sub-fund may use financial derivative instruments for hedging purposes and investment purposes. The financial derivative instruments the sub-fund is permitted to use include, but are not limited to, futures, options, swaps (such as credit default swaps and Total Return Swaps) and foreign exchange forwards (including non-deliverable forwards). Financial derivative instruments may also be embedded in other instruments in which the sub-fund may invest.
The sub-fund may invest up to 10% of its net assets in Total Return Swaps, however this is not expected to exceed 5%.
The sub-fund is managed without reference to any market index weightings.
The sub-fund is managed to provide a US Dollar return. The sub-fund's primary currency exposure is to the US Dollar and Emerging Market currencies.”
The Investment Objective of the Underlying Fund J55 HSBC Chinese Equity from the Effective Date shall read:
“Investments in Chinese equities include, but are not limited to, China A-shares and China B-shares (and such other securities as may be available) listed on stock exchanges in the People's Republic of China ("PRC"). The sub-fund may directly invest in China A-shares through the Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect, subject to applicable quota limitations. Furthermore, the sub-fund may gain exposure to China A-shares indirectly through China A-shares Access Products ("CAAP") such as, but not limited to, participation notes linked to China A-shares.
The sub-fund may invest up to (see table below for % of individual sub-funds) of its net assets in China A-shares through the Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect and up to (see table below for % of individual sub-funds) of its net assets in CAAPs. The sub-fund's maximum exposure to China A-shares (through the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect or CAAP) and China B-shares is (see table below for % of individual sub-funds) of its net assets. The sub-fund will not invest more than 10% of its net assets in CAAPs issued by any single issuer of CAAPs.”
The Investment Objective of the Underlying Fund L14 HSBC Russia Equity from the Effective Date shall read:
“The sub-fund aims to provide long term total return by investing in a concentrated portfolio of Russian equities.
The sub-fund invests in normal market conditions a minimum of 90% of its net assets in equities and equity equivalent securities of companies which are domiciled in, based in, carry out the larger part of their business activities in, or are listed on a Regulated Market in, Russia.
The sub-fund normally invests across a range of market capitalisations without any capitalisation restriction.
The sub-fund may invest up to 10% of its net assets in units or shares of UCITS and/or other Eligible UCIs (including other sub-funds of HSBC Global Investment Funds).
The sub-fund may use financial derivative instruments for hedging and cash flow management (for example, Equitisation). However, the sub-fund will not use financial derivative instruments extensively for investment purposes. The financial derivative instruments the sub-fund is permitted to use include, but are not limited to, futures and foreign exchange forwards (including non-deliverable forwards). Financial derivative instruments may also be embedded in other instruments in which the sub-fund may invest.”
Should you have any questions regarding these changes, please contact International Funds & Investments.