HSBC unveils Risk Controlled Greater China Fund

HSBC remains committed to providing customers with the most diligent investment solutions amidst market volatility of Hong Kong investors.

HSBC on Tuesday announced the launch of its HSBC Risk Controlled Fund Series – Greater China Fund, in Hong Kong. The Fund will provide investors with opportunities to capitalise on the growth potential of the Greater China markets through a unique risk controlled mechanism.

According to HSBC Global Research, Greater China is amongst the world’s fastest growing regions. HSBC forecasts that the Greater China region will grow by 7.5 per cent and 6.2 per cent for 2010 and 2011, respectively.

By comparison, the growth prospects for Greater China will be significantly higher than the 2.4 per cent and 1.8 per cent that HSBC forecasts for global developed markets in 2010 and 2011. The Fund’s attractiveness is supported by equity markets in this region that have delivered consistently stellar performances, providing investors with an average return of 74.4 per cent since 2009. Additionally, Hong Kong and Taiwan alone rose by over 80 per cent during the same time period.

The Fund also aims to capitalise on the long-term potential of Greater China, backed by solid economic fundamentals and attractive corporate earnings growth and valuations. The economic region benefits from China’s robust domestic consumption, and close economic co-operation between the three economies. Additionally, the Economic Co-operation Framework Agreement between China and Taiwan is expected to open up further opportunities in sectors including banking, manufacturing and tourism.

Bruno Lee, HSBC’s Regional Head of Wealth Management Personal Financial Services, Asia Pacific, said: “While many Hong Kong investors are interested in equity markets, there exists concerns around the level of market volatility. Given lingering investor uncertainties, HSBC remains committed to providing customers with the most diligent investment solutions, as demonstrated through this fund launch. Through our innovative HSBC Risk Controlled Fund Series – Greater China Fund, HSBC provides customers access to high growth Greater China markets while actively managing their risk exposure.”

The Fund will invest across the China, Hong Kong and Taiwan markets primarily via ETFs without benchmark constraints to generate optimal returns. Through an innovative risk controlled mechanism, HSBC will analyse market trends, volatility and valuation data to determine the optimal asset allocation between equity and cash holdings, which will range from 0 to 100 per cent throughout different market cycles.

Ken Sue, Managing Director and Head of Wealth Management Sales, Global Markets Asia Pacific, said: “The risks associated with investments are wide-ranging. Risk management is core to HSBC’s strategy of developing world-class investment products and through our risk controlled mechanism we can effectively control equity and cash risk while providing the flexibility to swiftly capture market upside.”

Bonnie Lam, Director and Head of Wholesale Business, Asia Pacific, HSBC Global Asset Management, said: “The majority of traditional equity funds limit cash holdings to 10 per cent and do not provide flexibility to increase thresholds. The Fund aims to address time sensitive market challenges and help investors to construct a healthy portfolio to accrue wealth amidst market volatility.”

Distributed exclusively through HSBC branches in Hong Kong, the HSBC Risk Controlled Fund Series – Greater China Fund combines the strengths of HSBC Global Markets as the fund manager implementing risk controlled mechanisms and HSBC Global Asset Management as the investment adviser, according to an HSBC report.

The initial public offering period of the Fund, with both US and Hong Kong dollar share classes available, will run from 15 to 29 November 2010. The minimum investment amount is US$1,000 or HK$10,000.