Domiciled in Luxembourg, the HSBC Global Investment Funds – Global Equity Volatility Focused Fund will aim to have a lower volatility than the MSCI All Country World Index.
The fund house currently distributes about 70 funds catering to the retail segment in Hong Kong and over 35 funds in Singapore.
The low volatility fund will seek to invest at least 90% of its assets in equities and related securities of companies domiciled or operating in both developed markets, such as OECD countries, and emerging markets. It will also invest in China through H shares.
Fund manager Angus Parker will use portfolio optimisation to lower overall portfolio volatility by selecting a combination of lower volatility stocks and higher volatility stocks that are less correlated, therefore diversifying the portfolio.
Parker who is head of developed equities at HSBC Global Asset Management, said: “Investors that are interested in gaining exposure to global equities, but are concerned about the impact of fluctuations, may consider a global equity fund that focuses on lowering volatility.”
As per an indicative portfolio allocation, the scheme’s most favoured country bet is US equities with a 56.5% weighting in the portfolio followed by the UK (10.4%), Japan (9.7%), and China (6.7%).
To avoid sector concentration, the fund will take exposure to both defensive and cyclical sectors with the top five indicative sector plays being financials with 19.4% weighting followed by consumer discretionary (16.3%), consumer staples (15.6%), energy (10.2%), and healthcare companies (9.1%).
The units of the fund are available to retail investors at a minimum application of HKD10,000 during the initial offer period from 18 June until 26 June with an initial subscription fees of 5.25%.
The fund is available in six different monthly distribution share classes and currencies including Hong Kong dollar and US dollar. The fund launch follows the recent announcement on appointment of Pedro Bastos as chief executive for Hong Kong and regional head of Asia Pacific.