HSBC Asset Management (HSBC AM) has announced the launch of HSBC Global Diversified Real Return Fund, a diversified portfolio with a focus on liquid real assets that aims to deliver returns exceeding the US inflation rate over the long term.
The composition of the fund focuses heavily on real assets, such as property equities, infrastructure equities, inflation-linked bonds, commodities and gold, which make up around 60% of its portfolio.
“Historically, real assets have performed better when compared with other asset classes in an inflationary cycle because of their price appreciation during the period and/or their inflation-linked earnings prospects,” said Yigit Onat, head of multi-asset for Asia at HSBC AM and the manager of the fund.
“Our focus on more liquid real assets such as inflation-linked bonds and property stocks ensures that the portfolio can react to rapidly changing market cycles in a timely and effective manner.”
The asset manager also noted that real assets can work as a hedge against inflation given their low correlation with other financial assets such as stocks and bonds.
With an active asset allocation, the fund also has the flexibility to invest in other asset classes such as global equities and bonds when the market cycle shifts, according to HSBC AM.
Currently, the largest allocation is 45% to equities, 30% to alternatives, 15% to corporate bonds and 10% to government bonds.
Hong Kong investors can begin investing in the fund during the initial public offering starting today and the fund will be officially launched on 13 January 2023.
The base currency is US dollars but share classes in six other currencies such as Hong Kong dollars, Australian dollars and Canadian dollars are also available.
The management fee is 1.25% per annum.