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Bond funds

Overview

Bond funds invest either directly through the purchase of bonds and similar instruments or by purchasing shares of other funds that already own such investments. In this way, they provide the individual investor with exposure to bond markets, without the need for a large initial investment.

* Eligible for Investment Savings Plan at a lower minimum.

Bonds

Bonds pay interest over a fixed term, or period of time. When the bond matures at the end of the term, the principal, or initial investment amount, is repaid to the lender, the owner of the bond.

Conservative investors use bonds to provide a steady stream of income. They buy a bond when it is issued and hold it, expecting to receive regular, fixed-interest payments until the bond matures. Then they get the principal back to re-invest.

HSBC Global Asset Management (Bermuda) Limited of 6 Front Street, Hamilton, Bermuda, is a wholly owned subsidiary of The Bank of Bermuda Limited, which is a member of the HSBC Group of companies. Both HSBC Global Asset Management (Bermuda) Limited and The Bank of Bermuda Limited are licensed to conduct investment business by the Bermuda Monetary Authority.

Funds managed by HSBC Global Asset Management (Bermuda) Limited are offered by Prospectus only in those jurisdictions where they are permitted by law. Persons are required to inform themselves and observe any relevant restrictions. HSBC Global Asset Management (Bermuda) Limited makes no representation as to the suitability of the funds for investors.

Investors should be aware that performance returns are affected by market fluctuations. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future performance. Investors should note that the use of derivatives and investments involving a currency other than their own will create foreign exchange exposure, which involves special risks. It is the aim of the Company to preserve capital and, where applicable, to maintain a stable net asset value per share; these aims are not guaranteed. Additionally, investors should consider their investment objectives, whether or not they can assume these risks and should undertake their own appropriate professional advice.