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Financial markets

Moody's Assigns Aaa-mf Rating to HSBC Sterling ESG Liquidity Fund

Strategic Insights

— 1 min read

HSBC's new Ireland-domiciled ESG-focused money market fund, Sterling ESG Liquidity Fund, has received an Aaa-mf rating from Moody's Investors Service. This fund aims to cater to investors seeking a low-risk investment with a focus on environmental and social governance (ESG) characteristics. The rating reflects the fund's ability to maintain liquidity and preserve capital, with an expected exposure to market risk being very low due to its short-maturity investments and high liquidity profile.

Key Takeaways:

  • The Fund has been assigned an Aaa-mf rating by Moody's Investors Service, indicating its very strong ability to meet its objectives of providing liquidity and preserving capital.
  • The rating is supported by the Fund's diversified portfolio of short-term securities with high quality at the time of purchase, with a focus on ESG metrics.
  • HSBC Global Asset Management (France), the Fund advisor, determines an ESG score for each issuer in the universe based on individual E, S, and G scores.
  • The Fund's eligible investment universe is limited to issuers that score in the top three quartiles based on the aggregate ESG score, while issuers in the bottom decile of each E, S, and G component are excluded.
  • The Fund will maintain a strong liquidity profile with a weighted average maturity below 60 days and a low exposure to market risk.
  • HSBC Global Asset Management had $625 billion in assets under management worldwide as of 30 June 2021, with $118 billion invested in liquidity funds.

Statistics:

  • The Fund has a very low exposure to market risk, expected to be below 60 days.
  • The Fund's liquidity profile is expected to be strong, supported by high levels of overnight and weekly liquidity in the portfolio.
  • The Fund's asset profile includes diversified short-term securities with very high quality at the time of purchase.
  • $625 billion in total assets under management for HSBC Global Asset Management worldwide as of 30 June 2021.
  • $118 billion in liquidity funds managed by HSBC Global Asset Management as of 30 June 2021.

Sources:

  • Moody's Investors Service, "Moody's Investors Service Assigns Aaa-mf Rating to HSBC Sterling ESG Liquidity Fund", [no date provided].
  • HSBC Holdings plc, "HSBC Group Investor Relations", [no date provided]

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