HSBC is set join a rapidly expanding market after announcing it will launch a fund of property funds in November.
The HSBC Open Global Property fund, set to launch on 26 November subject to FSA approval, will be managed by the firm’s multi-manager business in the UK.
Dr Guy Morrell, who heads up the HSBC Real Estate multi-manager team, says the aim of the fund is to produce long-term capital growth by investing in direct property funds and listed property securities funds across the globe.
He adds at outset, in terms of asset allocation, the fund is likely to have a strong focus on Continental Europe and Asia at the expense of the UK, which he says is currently overvalued. The fund will hold around 10-15 underlying funds on average.
Andy Clark, managing director, Wholesale, at HSBC Investments in the UK, says: “HSBC Open Global Property is designed to provide clients with exposure to an important asset class, which can help to diversify the total risk of an investor’s portfolio.
“We believe that this fund offers the best of both worlds – the diversification benefits of commercial property investment, without sacrificing liquidity.”
Clark adds the multi-manager structure of the fund distinguishes it from other similar products that have launched in recent years.
“The fund aims to provide a complementary offering for intermediaries, not just another substitute in a world where there are already too many similar products,” he says.
Morrell adds: “UK commercial property has been a highly popular asset class in recent years.
“However, we believe it is appropriate to take a global approach to property to provide investors with improved diversification and access to attractively-priced markets, wherever they may be based.”
The product is the third fund in HSBC’s OpenFund range, which is structured as a Non UCITS Retail Scheme (NURS). It follows the launch In November 2006 of the HSBC Open Global Return and HSBC Open Global Distribution funds.
Minimum lump sum investment for HSBC Open Global Property is £1,000 or £50 per month as regular savings.
The initial charge is 4% and annual management charge is 1.25%. Intermediaries are offered 4% front end commission and 0.5% trail commission.
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