HSBC launches new multi-asset funds

HSBC launches new multi-asset funds

HSBC Global Asset Management has added to its multi-asset range by rolling out three new funds for the UK market.

The Global Strategy Cautious Portfolio, Global Strategy Balanced Portfolio and Global Strategy Dynamic Portfolio aim to provide investors with a cost-effective core investment solution specifically tailored to their risk appetite.

HSBC said the funds are invested across a number of asset classes and global regions, all managed using an active asset allocation approach.

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The ongoing fund charges are targeting between 0.17 per cent and 0.20 per cent, with the focus on using passive investment vehicles that help keep the charges at these levels.

Phil Reid, head of UK wholesale at HSBC, explained their recent independent market research revealed that more than 90 per cent of IFAs look to multi-asset funds to meet their clients risk profile, while 74 per cent see them as a cost-efficient investment solution.

He said: “Our multi-asset fund range uses an active asset allocation process to identify what we believe are each fund’s optimal exposures to equities, bonds and property securities, across both developed and emerging markets.”

This process is re-run at least every three months, he continued, adding that shorter term views can be reflected in the portfolios through tactical asset class weight adjustments, while portfolio holdings are monitored on a daily basis.

The latest launch follows HSBC Global Asset Management adding an offshore global multi-asset income fund to its range last month.

That fund, managed by the team that runs its World Selection Income Portfolio, is designed to help investors benefit from the opportunities offered by global markets and different asset classes, while spreading investment risk.

HSBC’s fund launches come at the same time as Prudential launched a five-strong range of risk-managed funds designed to complement its existing £800m Dynamic Portfolio range.

The Dynamic Focused Portfolios, run by the Prudential Portfolio Management Group, will invest in active fixed income and real estate funds and real estate funds and passive equity portfolios, and each target a different level of risk and return.

Jason Hollands, managing director of business development and communications at Tilneybestinvest, said: “The march of multi-asset funds rolls on – we’ve seen a number of asset managers (and discretionary mangers – including Tilney Bestinvest) build out their ranges to cover a wider suite of risk and goal profiles.

“A large part of this trend is driven by changes in in the advice industry, as financial planning firms are looking for off-the-peg managed, multi-asset solutions – typically mapped to risk-profiling services such as Dynamic Planner and Finametrica – rather than building and managing portfolios themselves, a process which requires investment expertise and carries greater regulatory risk if portfolios are not rebalanced regularly.

“However, the latest wave of these funds (which includes recent launches from the likes of Aberdeen) is an increased focus on cost reduction, typically through use of passives.