21st March 2023 – HSBC Asset Management (HSBC AM) announces the launch of the HSBC Euro ESG Liquidity Fund, its latest ESG money market fund (MMF).
The new fund builds on the success of the HSBC Sterling ESG Liquidity and HSBC US Dollar ESG Liquidity funds – launched in October 2021 and October 2022 – which have grown rapidly to over £1.94billion1 and $735million1 AUM, respectively.
The HSBC Euro ESG Liquidity Fund will invest in a portfolio of issuers that have an A1, P1 or F1 rating, or long term equivalent, and that HSBC AM has identified as being demonstrably better at addressing ESG risks than other issuers in the investable universe. This will be achieved by applying HSBC AM’s robust ESG scoring system and relative ESG filters that are appropriate for the money market investable universe. The fund enables institutional investors – including large corporates, pension funds, insurers and others – to focus their cash investments in a solution that is aligned to their sustainability objectives.
Issuer engagement is a key component of the fund’s approach, including a client change orientated engagement programme. HSBC AM will encourage issuers to address identified shortcomings in how they manage ESG risks. This ensures that companies are aware that their ESG performance is factored into decisions on whether their short term debt issuance is eligible to be purchased by the fund. By doing so, it aims to increase the focus on better management of ESG risks and achieve more sustainable outcomes.
The climate change orientated engagement program will focus on the emissions trajectory of bank issuers. It will advocate for their participation in the Net Zero Banking Alliance and urge them to improve the quality and availability of their scope 3 carbon data. Any improvement HSBC AM can achieve will ultimately enhance the assessment of climate risk on portfolios.
Jonathan Curry, Global Liquidity CIO, HSBC AM said: “We are committed to delivering market-leading solutions to meet the responsible investment objectives of our clients and are pleased to see the expansion of our ESG MMF strategy.
“The fund has resonated strongly with investors seeking to align their cash investment activity with their organisations overall sustainability objectives. We look forward to building on the growing scale and breadth of our ESG funds.
“By expanding the currencies we offer, we can reach a more diverse group of global investors and enable them to invest in issuers that better manage ESG risks. Through our investment influence, we anticipate issuers of short-term debt will improve their ESG practices.”
HSBC AM currently manages liquidity assets in 11 global currencies and has USD146 billion in liquidity strategies (as at end of December 2022).