HSBC Global Asset Management has launched its World Selection offering in Hong Kong, a multi-asset investment product with a multi-manager approach.
The concept first launched in the UK early this year and has attracted $1.4 billion of customer investments to date. This global initiative will roll out to HSBC customers across Europe, the Middle East, the Americas and Asia-Pacific, with Hong Kong as the first market launch in this region.
However, multi-manager -- or 'manager of managers' -- is a far newer and less well accepted approach in Asia than it is in Europe, so the product is unlikely to see such a strong take-up in Hong Kong. Asian investors tend to want more transparency and control over their investments than is usually provided by multi-manager strategies.
Managed by Simona Paravani, World Selection comprises five sub-funds, each with a diversified range of investments, investment objectives and risk profiles. Each sub-fund will invest predominantly in other collective investment schemes, and may invest in derivatives and other securities.
The majority of the sub-funds' exposure will be in equity and fixed income, but may also include exposure to other asset classes such as real estate, hedge fund strategies, commodities, private equity and absolute-return strategies.
Bruno Lee, Asia-Pacific head of wealth management at HSBC in Hong Kong, says: "Although the global economy has been showing signs of recovery, with a strong year-to-date rebound in the performance of major global equity and bond markets, it is important for customers to take a diversified investment approach.
"World Selection has been developed as a core investment for investors with different risk appetites to smooth the ups and downs of recovering market conditions," he adds.
The financial crisis revealed the importance of downside risk management, says Bonnie Lam, Asia-Pacific head of wholesale business at HSBC. Traditional and alternative assets perform differently under different market conditions and have a low correlation to each other, she adds.
"Generally speaking, a mix of at least eight to 10 different asset classes in one portfolio may reduce risk exposure and allow investors to capture higher returns from multiple sources over the long term," says Lam.
The portfolios offer a mix of investment managers globally, which are selected and monitored by analysts from the multi-manager team at HSBC GAM. The firm deals with portfolio construction, day-to-day active management of the asset mix of the portfolios and due diligence on all underlying investments and managers.