Euro-denominated bonds
The aim of our euro fixed income strategies is to deliver attractive risk-adjusted returns over the long term through rigorous selection of issuers and sophisticated risk management.
View the full list of bond funds.
Our philosophy
We consider that European bond markets tend to incorrectly assess the underlying risks. To exploit these inefficiencies, several sources of performance with a low correlation can be combined to seek and maximise value. We believe that there are two major sources of alpha that offer opportunities.
- Credit strategies: we focus on identifying market asymmetries arising from the lack of fundamental credit research and the large number of categories of investors operating in the market with different and sometimes opposing constraints (rating, return, ALM, hybrid securities, etc). These asymmetries create discrepancies between risk premiums (valuation) and the actual credit risk (default risk).
- Government bond yield strategies: discrepancies between fundamental trends, valuations/expectations and yield curve movements. The portfolio management teams exploit bond market inefficiencies by combining, on one hand, the evaluation of risks associated with investing in interest rate markets and, on the other hand, the views and convictions of the portfolio managers.
Our process
Our investment process is mainly bottom-up, with a top-down component, which enables us to be reactive and to adjust our beta positions to reflect our economic forecasts. Given that market changes are not always linear, our process also seeks to generate alpha via relative value strategies.
- Active hands-on management, underpinned by proprietary research
- Independent management of each strategy in order to make the most out of the expertise of our portfolio managers
- Rigorous approach to risk budgeting
HSBC’s strengths
- A long track record in credit investment in Europe, dating back to 1968
- Credit strategies covering all asset classes: sovereign bonds, corporate bonds, covered bonds, subordinated debt, hybrid bonds, CDS
- An investment team with an average experience of 19 years in the sector, including experience of several market cycles and crises, which represents a substantial advantage in a period of uncertainty and high volatility.