Standard Life Investments (Asia), a leading investment house, has announced the launch of a new product developed specifically for Hong Kong institutional investors. Targeting local corporate pension plans, the Global Balanced Fund will seek to deliver long-term growth, while controlling volatility.
Domiciled in Hong Kong, the Global Balanced Fund has been carefully structured using Standard Life Investments' proprietary risk budgeting system. This dynamic process allows Standard Life Investments' fund managers to calculate the risk profiles of their portfolios in advance, rather than hedging the liabilities after the event. It also accounts for the portfolio risk generated by not holding a stock that can account for a third of the total risk of a portfolio.
Commenting on the fund launch, Kevin Smith, CEO of Standard Life Investments (Asia) states, "We believe that the Global Balanced Fund provides investors with security and performance that will help pension schemes provide the returns expected by their employees even in difficult market conditions. We have spent almost a year looking at the products currently available to ensure that appropriate risk is taken in our client funds; neither too much risk, nor too little risk."
Mark Bennett, Head of Business Development says launch of the balanced fund and its structure was based in part on discussions with local pension plans. ôThere's no doubt that balanced funds are still the foremost product that pension funds want and increasingly risk budgeting is a topic of conversation,ö he explains.
Approximately 75% of the Balanced Fund's assets will be invested in equities and the remainder in bonds and other money market instruments. Of the equity portion, almost 25% of the funds' total assets will be invested in Hong Kong and be managed primarily by Investment Director, Andrew Salton. The amount invested outside of Hong Kong, but still in Asia, will be 10%.
ôThis means we have a consistent approach to investing the global equity element, whilst ensuring that it is relevant to the needs of local institutions,ö Bennett adds.
Elizabeth Soon, Head of Pacific Basin Investments, also says, "While we intend the fund to be in the top quartile, Standard Life Investments is committed to managing risk for our investors in the same active manner as we follow in our investment philosophy of 'Focus on Change'. Our rigorous process means that not only do we look forward to anticipate key market drivers, but we also take a long term view."
This latest fund launch comes on the back of an expansion of their range of SICAV funds to include Global Equities and single country funds for Korea and Taiwan. Domiciled in Luxembourg, these three new sub-funds add to the seven sub-funds of the Standard Life Investments Global SICAV.