HSBC Asset Management (HSBC AM) announced today the launch of the HSBC GIF Asia ESG Bond Fund, an active fund investing in a portfolio of Asian bonds, favoring issuers with sound ESG profiles.

Classified as Article 8 under the EU SFDR regulation, the new fund will invest in a portfolio of Asian bonds, selected with a strong bias towards issuers with sound ESG profiles, aiming for a higher ESG score and a lower carbon intensity score than its reference benchmark, the JPMorgan ESG Asia Credit Index.

The fund will apply negative screening to exclude sectors with low ESG ratings, including weapons, thermal coal, gambling and tobacco, and issuers breaching the UN Global Compact Principles. Additionally, the fund will invest in sustainable bonds, including green bonds, sustainability linked bonds, transition bonds, and social bonds.

The new fund will be managed by Alfred Mui, Managing Director, Head of Asia Fixed Income Investment Management, and Wilson Yip, Associate Director, Fixed Income. Mui said:

“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.”

“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.”

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