Return to the Global home page

Sign in to online services
Private Banking Online
Other Services

Close window

HSBC Alternative Growth and Income 2008 USD Leveraged Note

1 July 2004

HSBC Republic Investments Limited are launching the HSBC Alternative Growth and Income 2008 USD Leveraged Note, an investment vehicle that offers leveraged exposure to some of the world’s leading hedge funds, together with the benefit of an annual coupon payment of 5%, on 28 July 2004. Closing date for notice of subscriptions is 26 July 2004.

The HSBC Alternative Growth and Income 2008 USD Leveraged Note (the "Notes") is an investment vehicle that offers leveraged exposure to some of the world’s leading hedge funds, together with the benefit of an annual coupon payment of 5%. But why consider investing in the Notes now?

  • The outlook for interest rates in recent months may indicate an upward trend, but levels are still low for those seeking income

  • The outlook for bonds in such an environment may be limited. Historically, as interest rates rise, bond values have tended to slide. Indeed, bonds do have interest rate risk and it could be argued that holding bonds in a rising interest rate environment may result in capital losses

  • Capital gains from equity markets in 2004 (to end-April) have been muted and may continue that way, given the prospect of rising oil prices, further geo-political tensions, possible rises in inflation, a slowing down of earnings growth and uncertain times for large economies such as that of China

However,

  • Diversified portfolios of hedge funds have shown their ability to generate positive returns in recent years, with lower volatility than traditional investments in a variety of market conditions

  • Diversified portfolios of hedge funds typically show negative correlation to bond markets and low to modest correlation to equity markets

  • With the volatility reduction effects of hedge fund portfolios and their lack of correlation to interest rates, the Notes may be a suitable substitute for bonds and a prudent way to diversify a portfolio in what could become a rising interest rate environment

More articles in Pressroom

Sponsorship and events

About you

Find out what HSBC Private Bank can do for you:

Our services