HSBC pushes multi-management to the masses
The firm has launched a multi-asset fund of funds to target the Hong Kong market.
HSBC Investments has reiterated its commitment to expanding fund of funds to the Asian market with the launch of a new go-anywhere portfolio for Hong Kong investors.
The HSBC Global Themes fund, to be managed by Hong Kong CIO Leon Goldfield, is an unconstrained vehicle, filtering geographic and industry themes down to a 20-fund universe and narrowing this further by qualitative analysis before finally settling on a portfolio of between five and eight investments. These can include mutual and exchange-traded funds.
HSBCÆs country and sector picks for 2007 include US investment banks, European utilities, China, Mexico, Malaysia, Hong Kong, Belgium, European telecom and US insurance.
According to Blair Pickerell, Asia Pacific CEO at HSBC Investments, the rationale behind this and other extensions of the companyÆs multi-manager capability is the ever-expanding universe of mutual funds makes choosing a vehicle as difficult for many investors as picking stocks.
ôIf you give people too much choice they donÆt buy anything,ö he argues. ôWe could simply go out and buy [talented managers] but it makes sense to stick to the markets that we know best. In recent times we have shed some asset classes, such as UK and US equities, and built on others.ö
Pickerell argues that investors in Hong Kong are well educated about investment products but less versed in portfolio construction, creating a gap in the market for HSBCÆs multi-manager products to fill. ôThe US represents just 1% of the market [for Hong Kong investors],ö he adds. ôWe have already seen companies put lots of products on the shelf only to find that nobody will buy them.ö
Joanna Munro, HSBCÆs London-based global CIO, notes that the firm is expanding its multi-manager team in Asia. The team now reviews third-party funds and manages $20 billion globally, of which $1.4 billion is sourced from Asian clients.
ôGrowth in multi-manager assets is three times that of single-strategy funds,ö she says. ôA survey of national pension schemes has shown that one third are considering a move to this investment model in the next few years.
ôIt only works if you understand the style of different asset management markets, such as the UK with its focus on mid-cap and JapanÆs emphasis on smaller companies. Multi-manager assets are on the rise and there is going to be a huge divergence in performance over time.ö
Munro adds that Taiwan and Japan have been the most receptive countries to fund of funds and predicts that the market could increase four-fold in the next few years. In line with the recent vogue for the asset class, she says, HSBC is considering adding Vietnam to its equity market coverage.
The HSBC Global Themes fund, to be managed by Hong Kong CIO Leon Goldfield, is an unconstrained vehicle, filtering geographic and industry themes down to a 20-fund universe and narrowing this further by qualitative analysis before finally settling on a portfolio of between five and eight investments. These can include mutual and exchange-traded funds.
HSBCÆs country and sector picks for 2007 include US investment banks, European utilities, China, Mexico, Malaysia, Hong Kong, Belgium, European telecom and US insurance.
According to Blair Pickerell, Asia Pacific CEO at HSBC Investments, the rationale behind this and other extensions of the companyÆs multi-manager capability is the ever-expanding universe of mutual funds makes choosing a vehicle as difficult for many investors as picking stocks.
ôIf you give people too much choice they donÆt buy anything,ö he argues. ôWe could simply go out and buy [talented managers] but it makes sense to stick to the markets that we know best. In recent times we have shed some asset classes, such as UK and US equities, and built on others.ö
Pickerell argues that investors in Hong Kong are well educated about investment products but less versed in portfolio construction, creating a gap in the market for HSBCÆs multi-manager products to fill. ôThe US represents just 1% of the market [for Hong Kong investors],ö he adds. ôWe have already seen companies put lots of products on the shelf only to find that nobody will buy them.ö
Joanna Munro, HSBCÆs London-based global CIO, notes that the firm is expanding its multi-manager team in Asia. The team now reviews third-party funds and manages $20 billion globally, of which $1.4 billion is sourced from Asian clients.
ôGrowth in multi-manager assets is three times that of single-strategy funds,ö she says. ôA survey of national pension schemes has shown that one third are considering a move to this investment model in the next few years.
ôIt only works if you understand the style of different asset management markets, such as the UK with its focus on mid-cap and JapanÆs emphasis on smaller companies. Multi-manager assets are on the rise and there is going to be a huge divergence in performance over time.ö
Munro adds that Taiwan and Japan have been the most receptive countries to fund of funds and predicts that the market could increase four-fold in the next few years. In line with the recent vogue for the asset class, she says, HSBC is considering adding Vietnam to its equity market coverage.
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