HSBC believes its newly launched Asian US Dollar Bond Index will make the measurement of fund performance in the region's debt market easier and more objective.
Sharad Desai, director and head of Asian debt product sales of HSBC's treasury and capital markets, said this was expected to bolster investor sentiment in this market.
The index adopts a liquidity-centric approach in adjusting the weighting to each of the constituent bond issues.
That means the index will not respond erratically to sporadic irrational trading but will reflect general changes in the market's trend.
The liquidity of an index constituent issue is determined by market participants' responses to a quarterly poll by an external agency.
The issue is then assigned a score on the three-level ranking - liquid, traded, illiquid - which represents weighting of 100 per cent, 50 per cent and zero per cent respectively.
Mr Desai said the bank aimed to establish the index as a benchmark for funds investing in US dollar denominated bonds issued in Asia outside Hong Kong.