News Digest:

HSBC Asset Management is turning to private credit and hedge funds to hedge against market volatility, viewing these assets as key defensive strategies in an increasingly unstable economic environment.

Joe Little, HSBC’s global chief strategist, described the current global economy as one of the most complex he has encountered. To diversify away from high concentration risk in the U.S., HSBC has overweight positions in India, China, and frontier markets while remaining underweight in Latin America and neutral in the UK due to economic concerns.

With volatility heightened by U.S. President Trump’s aggressive tariff policies, Little emphasized the importance of active portfolio management and tactical positioning. While government bonds remain a defensive asset, gold has surged above $3,000 per ounce, emerging as a preferred safe haven.

HSBC sees private credit as a ‘sweet spot’, offering low interest rate duration and high spreads, helping investors sidestep volatility. The bank recently expanded its private credit capabilities, launching a global transition infrastructure debt strategy and an EU direct lending strategy, collectively attracting over $240 million in commitments.

HSBC expects to triple its private credit assets under management from $7 billion to over $20 billion within five years. Little emphasized that private credit’s complexity creates an opportunity, making it crucial to invest with specialist expertise.

Source: https://citywire.com/wealth-manager/news/hsbc-bets-on-private-credit-and-hedge-funds-to-sidestep-volatility/a2462826