HSBC offers 2.5-year fixed term bond fund to Singapore retail investors

bobobob

Member
Joined
Dec 29, 2009
Messages
337
Reaction score
3
HSBC Global Asset Management is offering a 2.5-year fixed term bond fund to Singapore retail investors.

The Global Corporate Fixed Term Bond 2022 aims to generate a monthly dividend and to return net assets upon the bond's maturity in January 2022. The dividend is not guaranteed and may be paid out of capital, which will result in capital erosion and a reduction in net asset value, said HSBC.

It added that the final portfolio value will depend on the number of defaults and reinvestment rates over the life of the fund, and there is no guarantee of income and repayment of the principal amount invested initially.

According to HSBC, the fund is broadly diversified across investment grade and high yield bonds in developed markets and emerging markets, with a maximum of 30 per cent of its assets to be invested in non-investment grade bonds to achieve an average rating of BBB-.


It will have investments in North America, Europe and a "considerable weighting in Asia in terms of asset allocation", as HSBC sees attractive opportunities to be expected across the region.


A robust default analysis process is in place to monitor the underlying securities and ensure credit risk is managed, the asset manager said.

Just like traditional bond funds, the fixed term bond fund will be managed by an investment team and has a lower minimum subscription threshold than individual bonds.

Singapore retail investors can subscribe for the bond fund until June 25. The fund will begin trading on the same day.

With a base currency in US dollars, the fund also offers share classes in Singapore dollar, yuan and Australian dollar. Investors will be able to invest in denominations of US$1,000, S$1,000, 5,000 yuan and A$1,000.

For investors who wish to redeem the fund prior to the maturity date, swing pricing of up to 2 per cent of the redemption amount will apply to protect existing investors against transaction costs, said HSBC.

Puneet Chaddha, CEO and head of Southeast Asia, HSBC Global Asset Management, said HSBC offered this fund in response to strong investor demand for higher yield, and that it is the first time HSBC is extending fixed maturity bond funds to retail investors.

"The short tenor of this fund offers investors better predictability of potential income for the foreseeable future as typically shorter time to maturity can help to reduce impact of market volatility," he added.
 

beautyseek

Senior Member
Joined
May 10, 2012
Messages
835
Reaction score
35
Found details on hsbc site but cannot link address here. Sgd tranche target 3.07%. 1.8yr term. Mature Jan 2022

Does anyone know if any extra perks tied to HSBC Premier for investing? I recalled used to have bonus interest for investments last yr
 
Last edited:

henrylbh

Arch-Supremacy Member
Joined
Mar 9, 2004
Messages
15,777
Reaction score
702
Found details on hsbc site but cannot link address here. Sgd tranche target 3.07%. 1.8yr term. Mature Jan 2022

Does anyone know if any extra perks tied to HSBC Premier for investing? I recalled used to have bonus interest for investments last yr

Might as well go for OCBC structured investments that gives fixed 6% for a one year term. But this is only available to premier customers and min investment amount is 200k :s13:
 

BBCWatcher

Arch-Supremacy Member
Joined
Jun 15, 2010
Messages
20,124
Reaction score
3,018
I certainly don’t like the total expense ratio which is at least 0.625%/year. For comparison, CORP, the Blackrock/iShares London-listed investment grade corporate bond fund, has a TER of 0.20%.

Also, why would the forced liquidation in January, 2022, be a good thing? That seems quite odd.
 

beautyseek

Senior Member
Joined
May 10, 2012
Messages
835
Reaction score
35
Spoke with hsbc. Got sales charge of 1% for below 200k amt. So net YTM is 2.6% only. For info
 

beautyseek

Senior Member
Joined
May 10, 2012
Messages
835
Reaction score
35
Might as well go for OCBC structured investments that gives fixed 6% for a one year term. But this is only available to premier customers and min investment amount is 200k :s13:

Are u referring to those with strike price whereby investor gets bought into shares if strike is hit and if not get 6% interest on monies?
 

henrylbh

Arch-Supremacy Member
Joined
Mar 9, 2004
Messages
15,777
Reaction score
702
Think this kind of structured deposit quite lousy. Might as well ownself buy stocks.

It's different from structured deposit. The bank guarantees 6% pa interest and the worst case scenario is you get back share at the price, in lieu of cash, that you entered together with interest paid monthly.
 
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ. Forum members and moderators are responsible for their own posts.

Please refer to our Community Guidelines and Standards, Terms of Service and Member T&Cs for more information.
Top