The HSBC Asia Pacific ex-Japan Equity Volatility Focused Fund intends to achieve this through volatility optimisation.
According to the fund house, portfolio construction will take into account individual stock volatility and intra-stock correlation. It will cover both lower volatility stocks and higher volatility stocks with low correlation, hence achieving diversification while keeping volatility in check at a portfolio level.
Despite a positive outlook for Asia Pacific ex-Japan markets, the asset manager said investors might see more volatility in equity markets, especially in emerging markets, with the US Federal Reserve likely to start raising interest rates this year.
“For investors who are looking to tap the Asian growth theme but wish to experience less extreme market fluctuations, an active investment strategy focusing on volatility, quality, and value can be advantageous in capturing long-term investment opportunities while navigating short term uncertainties,” the firm said.
Pedro Bastos, chief executive in Hong Kong and regional head of Asia-Pacific, added: “The global financial crisis presented extreme market situations which left some clients still averse to risk and defensive in their equity investment approach.
“This fund is designed to give investors a smoother ride in the equity markets, while helping them achieve their wealth goals.”
In June 2014, the fund house had launched a similar product that was focused on global markets.
The firm claimed the product, the HSBC Global Investment Funds – Global Equity Volatility Focused, attracted over $1bn within two months of launch.
