EUROPE - HSBC quant specialist, Sinopia, has launched the first emerging market inflation-linked bond (ILB) fund for European investors.
Jean-Charles Bertrand, global head of fixed income and absolute return at Sinopia, said the fund offered attractive real interest rates as well as the ongoing improvement in emerging-country fundamentals.
"Because these countries are expanding quickly, inflation risks are significant," Bertrand said. "Therefore, investing in bonds that are pegged to inflation provides a high degree of security."
The benchmark gives a maximum weighting of 25% to the largest country in the index and Sinopia's quant process in constructing the portfolio will enable the firm to go overweight and underweight to gain the best returns.
Barbara Rupf Bee, global head of institutional sales at HSBC Global Asset Management, said: "The fund responds to the need for diversification. Most of all, it gives investors easy access to a new and booming asset class that is highly attractive in the current inflationary environment."
The nine countries in the index are: Argentina, Brazil, Chile, Colombia, Mexico, Poland, South Africa, South Korea and Turkey.
Dollar, sterling and euro share classes will be available for pension fund investors.
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