HSBC Global Asset Management has launched two lower carbon funds designed to reduce climate risks. The HSBC GIF Global Lower Carbon Equity fund and the HSBC GIF Global Lower Carbon Bond fund aim to address climate-related investment risk by using carbon data to achieve a lower carbon portfolio.
The new funds aim to address climate-related investment risk using robust composite carbon data to achieve a lower carbon portfolio than their respective reference benchmark.
The portfolio aims to achieve a lower carbon balance than its benchmark index by reducing the share of securities with the highest greenhouse gas emissions. The fund invests preferably in equities of developed markets worldwide. Its carbon intensity is to be reduced by over half of the reference index MSCI World Net USD.
The bond fund is also expected to achieve a better climate balance than its benchmark index. The overall impact of individual sectors and issuers on greenhouse gas emissions is taken into account. The fund is hedged into USD.
Recent research for HSBC found that 68% of institutional investors were planning to increase their low carbon investments in the year ahead, up 4.3% on last year.
Melissa McDonald, global head of Product – Equity and Responsible Investment, HSBC Global Asset Management, says: “Taking a proactive approach can help investors to mitigate the risks associated with climate change, estimated at a loss of return of 0.82 per cent per year for developed equities.”