Bonds and bills are borrowing instruments issued by institutions. The most common ones in Turkey are Treasury Bills and Government Bonds issued by the Undersecretariat of the Treasury to accommodate the central government's financing needs.

Corporations and governments that need to borrow money issue bonds. Corporate bonds usually offer greater returns than do Treasury Bills and Government Bonds in order to balance the greater risk of default.

Nominal value is the amount that the investor will receive upon redemption on the date of maturity for bonds sold at a discount. For bonds with coupon interest, nominal value is the amount used as a base for coupon interest and the amount that the investor will receive together with the last coupon payment on the maturity date.

Coupon rate is the proportion of nominal value to be paid as interest (or as a return on investment). Example: Consider a one-year bond with semiannual coupon payments, a nominal value of TL 1.000,00, and a coupon rate of 50%. This bond will pay TL 250,00 at the end of the first six months and TL 250,00 plus the nominal value of TL 1,00 at the end of the second six months (which is also the maturity date). The coupon rate and the coupon payment schedule are announced at the time of issue.

Maturity is the date that the nominal value is to be redeemed, and the last interest payment made.

Treasury bills and government bonds can be evaluated against other investment alternatives by calculating the bond’s current yield and yield to maturity (YTM). A bond’s annual current yield is calculated by dividing the annual coupon payment by the bond’s current market price.
Yield to Maturity (YTM) refers to the annual rate of return an investor is expected to earn if the bond is held until maturity. This calculation takes into account all coupon payments received throughout the bond’s life, together with the difference between the bond’s purchase price and the nominal value to be received at maturity. Yield to Maturity represents the Internal Rate of Return (IRR) that equates the present value of all future cash flows generated by the bond to its current market price.

If a Treasury bill or government bond is held until maturity, coupon payments and the repayment of the principal (nominal value) at maturity are obligations of the Ministry of Treasury and Finance of the Republic of Türkiye. However, if a Treasury bill or government bond is intended to be sold in the secondary (over-the-counter) market before its redemption date, its value may fluctuate depending on factors such as interest rates, time to maturity, inflation expectations, risk premium, and other market conditions.

As interest rates, inflation expectations, and risk premium increase, the value of a Treasury bill or government bond generally declines, and the magnitude of this decline becomes greater as the remaining time to maturity increases. Similarly, as interest rates, inflation expectations, and risk premiums decrease, the value of a Treasury bill or government generally increases, and the magnitude of this increase becomes greater as the remaining time to maturity increases.

To participate in Treasury Auctions via HSBC, you need to have an account with us. You can participate through any HSBC Branch by presenting a written order stating the amount and rate that you wish to invest. The order should be registered by 11:00 on the day of the auction.

You can also participate in Treasury Auctions via HSBC Retail Internet Banking. Just look for the "Treasury Auctions" menu.

An mutual fund is a pool of assets without legal personality, formed by collecting investors' money in exhange for fund units and investing these assets in various financial instruments. The fund is managed by professional portfolio managers in accordance with fiduciary principles and predefined investment rules.

Mutual funds are collective investment schemes established by Portfollio Management Companies pursuant to their bylaws.

Fund managers conduct market research and seek to invest in suitable asset classes at appropriate times in line with the fund's investment strategy.

Money Market Funds: Invest in short-term money market instruments and debt securities. They generally offer lower risk and high liquidity.

Fixed Income Funds: Invest in fixed income securities such as government bonds and corporate bonds. They generally provide more stable returns, although their long-term return potential may be lower than equity funds.

Equity Funds: Invest primarily in publicly traded equities. They offer higher return potential but are subject to greater market risk.

Variable Funds: Invest in multiple asset classes, including equities and bonds. They aim to provide a balanced risk-return profile through diversification.

Gold Fund: Invest in gold and gold-related capital market instruments. They are often preferred as a safe-haven investment during periods of economic uncertainty.

You can easily and quickly buy and sell mutual funds through HSBC Mobile Banking, Online Banking, or at any of our branches.

In addition, you can invest in mutual funds established by HSBC Asset Management and those available on the TEFAS(Turkiye Electronic Fund Trading Platform) through investment institutions that are members of the TEFAS.

You can access detailed information about the HSBC Asset Management fund you wish to invest in on the HSBC Asset Management website and the TEFAS.

Mutual funds classified as unconstrained funds may only be purchased by Qualified Investors.

Qualified Investors are natural persons or legal entities that hold Turkish Lira and/or foreign currency and/or capital market instruments with a total value of at least TRY 10 million.

TEFAS (Turkiye Electronic Fund Trading Platform) is an electronic fund platform that enables investors to compare all mutual funds through a single system and access all funds available in the market through single investment account.

An equity fund is an mutual fund that pools investors' money and invest in a number of different companies.

These funds generally invest a significant portion of their portfolios, typically around 80%-90%, in equities. As they are classified as equity-intensive funds, they are required to maintain at least 80% of their portfolios in equities at all times.

Fund managers select companies, rebalance the portfolio, and make adjustments in line with market conditions. This provides investors with the benefits of diversification and professional portfolio management.

In summary, instead of investing in a single company, you invest in dozens of different companies though a single investments.

Click here to explore HSBC Equity Funds.

Gold funds enable investors to invest in gold and gold-related financial instruments instead of purchasing pysical gold directly.

These funds invest in gold-related investment instruments or directly in bullion.

Investing in a gold fund instead of of purchasing pysical gold offers several advantages:

• It eleminates the need to store physical gold and ensure its security.
• There are no physical transaction costs or risk of loss associated with buying and selling physical gold.
• Investments can be made even with small amounts.
• These funds are generally transparent and can be bought and sold easily.

In summary, they offer a more practical, secure, and liquid investment solution.

HSBC Asset Management’s Gold Fund invest in instruments linked directly to gold prices.

This fund enables investors to benefit from price movements in the gold market while also providing liquidity and security. In addition, since investments can be made even with small savings, it is an accessible alternative for young investors. For those seeking long-term protection against inflation, portfolio diversification, and a way to mitigate the impact of economic uncertainty, products such as HSBC’s Gold Fund may be a prudent investment choice.

Click here to explore HSBC Gold Fund.

Variable funds do not have a specific target asset allocation in their portfolios. Instead, they can flexibly switch between different asset classes, such as equities, bonds, and commodities, depending on market conditions. In other words, they are not tied to a fixed investment policy.

In variable funds, fund managers continuously monitor the market and manage the portfolio dynamically.

Rather than passively tracking an index, they make active investment decisions to identify opportunities or avoid risks.

For example, if a variable fund manager believes that equity markets have become significantly overvalued, they may reduce the fund’s equity allocation and increase its bond or cash position.

When market opportunities arise, they may increase the fund’s equity allocation again.

This active approach provides the potential for higher returns while also helping to limit losses. However, unlike an equity fund manager, who is required to maintain at least 80% of the portfolio in equities regardless of market conditions, a variable fund manager has greater flexibility in asset allocation.

Variable funds offer several important advantages:

• Quick Adoptation to Market Conditions: Fund managers can respond immediately to market fluctuations by adjusting portfolio positions quickly.
• Risk Management: During periods of heightened risk, fund managers can adopt more defensive positions, helping to mitigate significant losses.
• Opportunity Creation: When markets decline, fund managers can invest at lower prices to establish stronger long-term positions.
• Flexibility: By investing across multiple asset classes, such as equities, bonds, and gold, variable funds provide investors with a diversified portfolio through a single fund.

In summary, variable funds can be an effective investment vehicle for both capital preservation and capturing investment opportunities.

Click here to explore HSBC Variable Funds.

To trade equities, you can open an HSBC Investment Account through Mobile Banking, Online Banking, or at any of our branches.

Once you have opened your investment account, you can place a buy order through Mobile Banking by selecting “Buy Equities” and then “Place Order”.

Once you have opened your investment account, you can place a buy order through Online Banking by selecting “Equities” and then “Order Entry”.

Buy and sell transactions are carried out in accordance with the Borsa Istanbul Equity Market trading hours: 09:40-18:10 on full business days and 09:40-12:40 on half business days.

Cash and equity transfers are settled two business days after the execution of the transaction (settlement date).

For detailed information about equity trading, you can visit the HSBC Investment website.

With the HSBC Active Account, the cash deposited into your current account are invested in the HSBC Short Term Fixed Income (TL) Fund (HPT), while your bill payments, loan repayments and recurring payments are made automatically without the need for manual tracking.

Amounts exceeding the HSBC Active Account minimum balance of TRY 10.000 are automatically invested in the HSBC Short Term Fixed Income Fund. You may increase this minimum balance according to your needs.

All credit card payments, HSBC Advantage Credit Payments, personal loan repayments (excluding overdraft account repayments), future-dated ETF/wire transfer instructions, and recurring or automatic bill payment instructions are collected on the due date by redeeming the fund units, where necessary.

Click here for detailed information.

Dual Currency Deposit (DCD) – Alternative Foreign Exchange: A structured investment product combining a foreign exchange option and a time deposit used as collateral. In a foreign exchange option transaction, the customer sells the option right to the Bank, assumes foreign exchange risk, and, in return for taking this risk, has opportunity to increase the overall return generated. If the foreign exchange market moves in line with the customer’s expectations, the customer may earn a higher return than a standard time deposit over the investment term. Through a DCD transaction, the customer may increase the return by assuming foreign exchange risk in line with market expectations. However, if the exchange rate moves against the customer’s expectations at maturity, the investment value may fall below the initial investment amount (a loss of principal in the original currency may occur).

Alternative Precious Metals (Gold and Silver): A structured investment product combining a precious metals option and a time deposit used as collateral, available for gold and silver. In a precious metals option transaction, the customer sells the option right to the Bank, assumes gold or silver price risk, and, in return for taking this price risk, has the opportunity to increase the overall return generated. Through an Alternative Precious Metals transaction, the customer may increase the return by assuming gold or silver price risk in line with market expectations. However, if the price of gold or silver moves against the customer’s expectations at maturity, the investment value may fall below the initial investment amount (a loss of principal in the original currency may occur).

In Alternative Precious Metals (DCD) transactions, the relevant metals may only be traded against FX. In Vanilla Option transactions, Precious Metals may also be traded against FX.

For detailed information and to carry out a transaction, please contact your branch.

An option is a contract that gives the buyer the right, but not the obligation, to buy or a sell a specified amount of a particular underlying asset (such as foreign currency, equities, bonds, commodities, precious metals, etc.) at an agreed price within a specified period or on a specified maturity date. Depending on the customer’s preferences and investment objectives, the customer may sell an option to the Bank in exchange for receiving an option premium or purchase an option from the Bank by paying an option premium.

European-Style Foreign Exchange Option: A Foreign Exchange Option grants the holder the right to buy or sell a specified amount of foreign currency at a predetermined strike price on a specified future date agreed in the contract. The option holder may exercise this right but is under no obligation to do so. To obtain this right, the option buyer must pay an option premium to the option seller. Where the customer is the option buyer, the customer pays an option premium to the Bank, and the right to exercise the option belongs to the customer. Where the customer is the option seller, the Bank pays an option premium to the customer, and the right to exercise the option belongs to the Bank.

A Foreign Exchange Option provides protection to the buyer against adverse movements in foreign exchange rates while allowing the buyer to benefit from favourable spot exchange rates that may prevail at maturity. For the option seller, the option premium represents income if the exchange rate moves in line with the seller’s expectations by maturity. Through a Foreign Exchange Option, customer may enhance their returns by assuming foreign exchange risk in line with their market expectations. However, if, at maturity, the exchange rate moves contrary to the customer’s expectations, the option buyer may incur a loss up to the amount of the option premium paid. Likewise, if the exchange rate moves contrary to the customer’s expectations, the option seller may also incur a loss, and the customer’s investment may fall below its initial value.

European-Style Precious Metals Option (Gold and Silver): A precious Metals Option grants the holder the right to buy or sell specified amount of precious metals or foreign currency at a predetermined strike price on a specified future date agreed in the contract. The option holder may exercise this right but is under no obligation to do so. To obtain this right, the option buyer must pay an option premium to the option seller. Where the customer is the option buyer, the customer pays an option premium to the Bank, and the right to exercise the option belongs to the customer. Where the customer is the option seller, the Bank pays an option premium to the customer, and the right to exercise the option belongs to the Bank.

A Precious Metals Option protects the buyer against adverse movements in gold or silver prices while allowing the buyer to benefit from favourable spot prices for gold or silver that may prevail at maturity. For the option seller, the option premium represents infome if the price of gold or silver moves in line with the seller’s expectation by maturity. If, at maturity, the price of gold or silver moves contrary to the customer’s expectations, the option seller may also incur a loss, and the customer’s investment may fall below its initial value.

For further information or to execute a transaction, please contact your branch.

A Swap is a transaction that enables different foreign currencies or precious metals to be exchanged on the transaction date and re-exchanged on the maturity date at exchange rates and parity levels agreed on the trade date. Under this transaction, the customer converts the agreed amount of foreign currency or precious metal into the corresponding foreign currency or precious metal at the exchange rate agreed on the trade date for the period until maturity. Upon maturity, the customer converts back into the original foreign currency or precious metal at the exchange rate agreed on the trade date.

If preferred, the customer may also enter into this transaction as a Deposit Swap, allowing the investment to earn deposit interest until maturity.

These transactions may be conducted based on foreign exchange (FX), gold or silver. For further information, please contact your branch.

A futures is a standardized agreement between two parties that obligates them to buy or sell a specified underlying asset, with predetermined characteristics, at a predetermined price on a specified future date. Underlying assets may include commodities (such as agricultural products, energy products, and industrial metals), equities, equity indices, interest rates, precious metals (including ounce gold and gram gold), foreign exchange and/or currency pairs.

Futures are traded on the Borsa Istanbul Futures and Options Market (VIOP), an organized exchange operated by Borsa Istanbul (BIST). For further information on futures, please click here.

To trade futures, you may open an HSBC Investment Account through HSBC Mobile Banking, Internet Banking or at any HSBC Branch.