HSBC finds access to “difficult” Indian fixed income market

India difficultHSBC Global Asset Management is today launching an Indian fixed income fund, investing in a market it said was 'particularly difficult to access for global investors'.

Gordon Rodrigues, head of Asian rates, foreign exchange and liquidity, manages the Ucits-compliant HSBC GIF India Fixed Income fund.

Rodrigues and his team will select primarily domestic government and corporate bonds denominated in Indian rupee.

They will, however, also have the flexibility to invest in bonds issued in other currency as long as they have a strong India connection.

Investments are made using a foreign institutional investor (FII) licence, authorised by the Securities and Exchange Board of India.

Rodrigues said the Indian fixed income markets were more difficult to access for global investors than others.

His fund will therefore use three key access points: direct access to the domestic bond market through FII quota, indirect access through non-rupee denominated bonds linked to Indian companies or cash hedged back into rupees; and synthetic exposure to India bonds through structured notes.

The new fund sits under HSBC’s Luxembourg-based Global Investment Fund range, which has funds registered for sale in about 30 countries. Although the base currency is dollars, the underlying exposure will be to the Indian rupee.

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