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Investing in emerging markets has been the trend among many new fund launches lately, and many fund managers cite the improvements in the emerging market economies and the growth potential of the stocks listed there.
Emerging markets are transforming from primary resource-based economies to consumption-driven ones. Their GDP growth, which is expected to reach 6.5% in
2007 and 6.6% in 2008, will continue to outpace that of developed markets.
HSBC InvestmentsÆ Emerging Wealth will invest in both global and local companies that engage in manufacturing, distributing or retailing consumer goods and services in emerging markets.
ôEmerging markets represent 77% of the worldÆs population,ö says Bonnie Lam, director and head of fund marketing at HSBC Investments. ôThe robust economic growth in these markets has resulted in an expanding labour force, increasing urbanisation, accelerating income growth and a rapidly growing number of high net-worth individuals, making domestic consumption in emerging markets an investment theme of high growth potential.
The fund will be managed by Sinopia Asset Management, the quantitative investment specialist of the HSBC Group, and will invest in an active portfolio of around 70-80 stocks based on a multi-criteria stock scoring methodology.
ôQuantitative management is particularly suitable for defining an investment
universe that corresponds to a certain theme, such as consumption trends in emerging markets,ö says Patrice Conxicoeur, chief executive of SINOPIA Asset Management for Asia Pacific.
To achieve a diversified portfolio, the fund will invest in a minimum of six sectors, including consumer discretionary, consumer staples, telecommunications, energy, financials, health care, information technology and utilities.
The fund will have an initial sales charge of 5.25% and an annual management fee of 1.5%.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.