HSBC Asset Management (HSBC AM) announces the launch of a new ESG money market fund (MMF), the HSBC US Dollar ESG Liquidity Fund. This follows the successful launch of the HSBC Sterling ESG Fund, which has grown rapidly to over £1billion since its launch in October 2021[1].
The 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 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 is aligned to their sustainability objectives.
Issuer engagement will also be 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, HSBC AM 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 ambitions of our clients. Our Sterling ESG money market fund has resonated strongly with investors seeking to align their cash investment activity with their organisations overall sustainability objectives.
“Expanding the currencies in which we offer within our ESG MMF strategy to include the US Dollar fund, will allow us to reach a more globally diverse group of investors, enabling them to invest in issuers that better manage ESG risks and with this investment influence, we anticipate issuers of short term debt will improve their ESG practices.”
HSBC AM currently manages liquidity assets in 10 global currencies and has USD146 billion in liquidity strategies (as at end of June 2022).
[1] – As at October 2022
