HSBC Investments is set to launch a global fund investing in firms addressing climate change.
The firm says the HSBC Climate Change fund, set to open to investors on 9 November, will aim to outperform its own index – the HSBC Global Climate Change index – which was launched in late September.
It adds the fund will be part of its Luxembourg-based Global Investment Funds SICAV, which is available for sale in 35 countries across the world, including the UK.
HSBC says retail and institutional share classes will be offered on the fund, with a minimum investment amount of $5,000 – and an AMC of 1.5% - on the retail side.
Based on internal bank testing, HSBC says its climate change index has delivered a return of 125% since January 2004, outperforming the MSCI World index by almost 70%.
HSBC says the fund will be managed by SINOPIA, the “active quantitative specialist” of the HSBC Group.
It adds SINOPIA will use its active quant stock selection models to score stocks in the index based on a number of criteria including relative valuation, earnings momentum and price volatility.
Based on this scoring, prevailing stock liquidity and market capitalisation, HSBC says the fund will invest in around 60 companies that are considered most promising in terms of expected returns.
Farley Thomas, global head of wholesale at HSBC Investments, says: “HSBC considers climate change to be one of the biggest investment themes for the foreseeable future.
“In launching this fund, our aim is to offer investors greater choice when aiming to capture climate change opportunities.
“Our active quant approach to climate change investing is innovative and HSBC Investments is pleased to be the first to use the new HSBC Global Climate Change index as a public mutual fund benchmark.”
Stephen Green, group chair of HSBC Holdings plc, adds: “Climate change is an issue affecting all of us, creating risks and opportunities that we must address at various levels.
“The launch of the HSBC Climate Change fund complements several other initiatives sponsored by HSBC, including the recent launch of the HSBC Global Climate Change Index.
“This underscores HSBC’s commitment to offering practical climate change investment solutions to our clients.”
The HSBC Global Climate Change index was launched on 25 September 2007 by HSBC Global Research.
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