As investors continue to focus on yield and quality in their bond exposure, several market trends bode well for boosting allocations to Hong Kong dollar (HKD) issuance, according to HSBC Asset Management (HSBC AM).
Regional bonds offer great interest to investors and issuer alike. Hong Kong’s bond market offers a rare opportunity, said speakers at a webinar.
The various features and benefits of Hong Kong dollar (HKD) bonds make them an important addition to the portfolios of institutional investors of all types. This video highlights the role and application of this asset class.
A survey of around 100 institutional investors across Asia in late 2019 - conducted by AsianInvestor and HSBC Global Asset Management - has revealed the appetite, trends, challenges, opportunities and a potential roadmap for Hong Kong dollar (HKD) bonds in portfolios.
Cecilia Chan, chief investment officer for fixed income at HSBC Global Asset Management in Asia-Pacific, explains why the firm's strategic outlook on Hong Kong dollar bonds remains positive.
Even the most active buyers of Hong Kong dollar (HKD) bonds want more from this asset in terms of liquidity, issuer diversity and tenor – otherwise it might become more marginalised in portfolios.
There is continued appetite for this asset class as a portfolio tool for investors to achieve specific goals such as matching liabilities and avoiding currency risk. But greater choice, more liquidity and higher yields are in growing demand.
Geoffrey Lunt, senior product specialist for Asian fixed income at HSBC Global Asset Management, explains the role and benefits of Hong Kong dollar bonds, especially for domestic institutions.
The backdrop for Hong Kong dollar bonds appears supportive for those investors seeking tried-and-tested assets to weather the uncertain macro outlook.
Taking an active approach to managing fixed income portfolios can be the key to outperformance. Doing this effectively matters in Asia, in particular, given the higher risk of defaults in 2019.
The long-awaited inclusion of onshore China bonds in a global index is a tipping point for fixed income investing that may influence portfolios going forward.
Cecilia Chan, fixed income CIO for HSBC Global Asset Management in Asia-Pacific, is preparing for a more volatile landscape in 2018, seeking to add alpha from the opportunity to manage portfolios more actively again.