Intermediaries targeted with investment models developed for hsbc private clients
Two more groups are entering the multi-manager market with HSBC set to launch three funds of funds and Alexander Forbes gaining FSA approval to offer a manager of managers range to UK pension investors.
One of the HSBC products, to be run by Jon Rebak, is an income product with up to 50% exposure to corporate bonds funds, 15% in UK high-yield bond funds and 35% in UK equity income portfolios.
The group will also target intermediaries with Growth and Global Growth portfolios, to sit in the Balanced Managed and Global Growth sectors respectively. The three funds were initially launched through HSBC's 1,600-strong branch network, with a three-week initial offer period running from 3 to 21 February. Rebak, who previously managed funds of funds for HSBC Investment Management, is currently running model portfolios into which cash raised will be invested. The group hopes to pull in at least £100m by the end of 2003.
HSBC has launched the range based on research from its private clients, who have had access to similar strategies for two-and-a-half years.
The Income fund of funds currently offers a 5.6% gross yield per year. The fund targets above-average yield, distributed to investors on a quarterly basis or is reinvested for clients preferring that option. The potential make-up of the Growth and Global Growth portfolios are still being decided, although both will be equity and long-term orientated. The portfolios will make use of the group's global multimanager resources, 18 analysts based in four locations, namely Hong Kong, London, Paris and New York.
Jonathan Polin, managing director of intermediary business at HSBC Asset Management, said the three portfolios are the first of a raft of similar products the group hopes to launch into the intermediary market.
All three vehicles are sub-funds of the HSBC Investment Funds of Funds Oeic. The annual management charge is 1.25%, with an initial fee of 4%. Discounts are available, based on the size of the investment.
Minimum investment is £500 and the funds are available as Isas and Peps. Initial commission will be 3% with 0.5% renewal.
Investor Solutions, a division of South African group Alexander Forbes, which comprises the former Schroder Pension Services unit it purchased last September, is to launch its multi-manager products into the UK pensions market after gaining FSA approval.
Rael Gordon, group chief executive at Alexander Forbes, said the firm's manager of managers offerings will also be made available to UK private investors in due course.
Investment Solutions' funds of managers range includes money market funds, hedge funds as well as equity and bond-focused portfolios. In addition to providing investment products, it is marketing its pensions administration services to UK defined contribution pension scheme providers.
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