HSBC Asset Management (HSBC AM) announces the launch of a new ESG money market fund (MMF), the HSBC Sterling ESG Liquidity Fund. The fund has received seed investment from British multinational retailer Tesco.
The fund will invest in a portfolio of issuers that have an A1, P1 or F1 rating, or long term equivalent, and are demonstrably better at addressing ESG risks than other issuers in the investable universe. This will be achieved by applying a robust ESG scoring system and relative ESG filters that are appropriate for the money market investable universe. The fund will enable institutional investors – including large corporates, pension funds, insurers and others – to focus their cash investments in a solution that helps them meet their own sustainability objectives.
Issuer engagement will also be a key component of the fund’s approach. To meet sustainability goals, HSBC AM will be encouraging 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, HSBC AM aims to increase the focus on better management of ESG risks and achieve more sustainable outcomes.
In addition to the investment process focused on addressing ESG risks and opportunities, the fund will look to evolve to include other features to provide further contribution to investors’ sustainability objectives.
Paul Griffiths, Global Head Institutional Business, HSBC AM said: “The launch of our first ESG MMF is another innovative example of how we are providing our clients with opportunities that enable the transition to a more sustainable world.”
Jonathan Curry, Global Liquidity & Americas CIO, HSBC AM added: “We are committed to delivering market-leading solutions to meet the responsible investment ambitions of our clients.
“For corporate treasurers, the use of a money market fund that credibly applies ESG to its investment process can contribute to the company’s overall sustainability objectives. For individual or institutional investors with a specific focus on sustainable investing, cash no longer needs to be an afterthought in a sustainably invested portfolio.”
HSBC AM currently manages liquidity assets in 10 global currencies and has USD118 billion in liquidity strategies1. In 2020, the firm set out its strategy to re-position the business as a core solutions and specialist emerging markets, Asia and alternatives focused asset manager, with client centricity, investment excellence and sustainable investing as key enablers.
[1] – As at 30 June 2021
