Multi-manager  

Equities and bonds give HSBC fund 24% return

The £189.23m fund is ranked 12th out of 121 in the Investment Managers Association Mixed Investment 20-60 per cent share category, according to latest data from Morningstar, with a three year return almost 8 percentage points higher than the peer group average of 15.96 per cent.

The fund was launched in February 2003, and Mr York took over as manager in January 2011. He said it took investment exposure from collective investment schemes in a range of asset classes, led by UK equity and UK non-government fixed income, in addition to global high-yield bonds, global equity and cash.

The fund has a minimum lump-sum investment of £1000 with a total expense ratio of 1.91 per cent. Mr York said the fund was suitable for investors looking for an average income with capital growth, and had little exposure to credit or cash-flow risk.

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Its top holdings include the Luxembourg-domiciled £479m HSBC ISF Multi Alpha Sterling Bond, the £280m HSBC Income Institutional Fund, and the £4.68bn Artemis Income Fund.

In comparison, the £29.49m Insight Investment Diversified High Income Fund is ranked 113 of 121 in its peer group, delivering a three-year return of 4.61 per cent.

The fund, launched in March 1997, has been managed since January 2009 by Steve Waddington, and aims to produce a high level of income together with potential capital growth and positive total returns on an annual basis.

With a diversified multi-asset portfolio, Mr Waddington invests across a broad range of asset classes, including fixed income, cash, near cash and deposits, in addition to equities, indirectly in property and collective investment schemes such as structured products.

Top holdings include the £10.3m Insight Investment GBP Liquidity Class 2 Fund, the £1.36bn iShares Markit iBoxx GBP Corporate Bond, and the Can$43.8m (£27.7m) iShares JP Morgan Emerging Market Bond Index Fund.

Darius McDermott, managing director of London-based Chelsea Financial Services, said: “The HSBC fund has had good capital growth, and is first quartile over most time periods. The fund had a change of manager two years ago but he has continued in the same vein with some very good returns.

“An unfettered multi-manager fund, costs have been kept to a reasonable level too with a total expense ratio below 2 per cent as it has a number of HSBC funds in the portfolio. It is still relatively small with under £200m in assets.

“The Insight fund has not done so well and after being hit pretty badly in 2008, has failed to recover its unit price pre-2007 and has lagged in the 3rd and 4th quartile of its peer group. Its one saving grace has been an above average income of above 6 per cent.

“The fund is due to be merged with two other Insight funds in February, with all three going into a new Global Multi-Strategy Fund run by the same manager. The new fund has a capital growth objective with less emphasis on income so, while I am supportive of the overall move by Insight to clean up its range, investors looking for income specifically may be better served in an alternative product.”