HSBC gives SG investors access to China through new fund
The HSBC Global Investment Fund (HGIF) China Multi-Asset Income (“Fund”) invests in a diversified portfolio of equity securities and fixed income. The equity allocation consists of China onshore A-Shares1, B-Shares2 and red chips3, offshore China H-Shares4 and ADRs5. The fixed income allocation comprises of onshore and offshore fixed income instruments.
By combining both equities and fixed income investments in the same portfolio, the Fund aims to capture opportunities in different phases of the economic cycle in China. The Fund’s asset allocation is actively managed by HSBC’s multi-asset investment team based in Hong Kong.
HSBC Global Asset Management China market outlook
HSBC’s economic outlook for China remains positive. Government policies to stimulate economic growth are robust with a major focus on stabilising corporate leverage ratios. This bodes well for an increased emphasis on more quality, sustainable growth. Any downward pressure on growth could also lead to further structural reforms.
In the past few years, China has progressively opened up to global capital markets and deepened economic ties in Asia and globally. This is in tandem with rising domestic Chinese consumer demand. Chinese equities remain attractive from a valuation perspective while benign inflation and monetary easing should all be supportive of China’s fixed income market as well.
Commenting on the launch for Singapore investors
Puneet Chaddha, CEO and Head of Southeast Asia, HSBC Global Asset Management, said: “We launched the fund because investors in Singapore want to tap into the China growth opportunity but are cautious of volatility. By combining the two asset classes of equities and bonds, the fund balances growth and stability to help deliver an enhanced risk-adjusted return. We also believe China is in a late stage cycle and attractive valuations make it a good time to consider investing. We hope investors will find this proposition interesting not only because it is quite a unique offering in the Singapore retail space, but also because investors can benefit from HSBC’s heritage and long-standing experience in China.”
Denis Gould, Chief Investment Officer, Multi-Asset and Wealth, HSBC Global Asset Management, shared: “China is transforming from a fast-growing economy to a more quality-focused one. The positive outlook, recent attractive valuations and interventionist policies should begin to drive markets and deliver attractive medium to long term returns.”
Importance of multi-asset allocation
For investors, constructing a diversified asset portfolio helps strike the balance between managing volatility risks whilst delivering sustainable returns over the longer term. The Fund enables investors in Singapore to participate in China’s growth while diversifying risk across asset classes and sectors.
Denis Gould is the lead fund manager, while Joy Yuan, Investment Director, Equities, Asia Pacific and Alfred Mui, Investment Director, Fixed Income, Asia Pacific are the managers of the equity and fixed income sleeves respectively.
The Fund is available to investors in Singapore in SGD and USD. The Fund is also available in other currencies that can be accessed by institutional and accredited investors.
- A-shares: companies based in China that trade in renminbi on the Shanghai or Shenzen stock exchanges
- B-shares: companies based in China that trade in foreign currency on the Shanghai or Shenzhen stock exchanges
- Red chips: companies based in China based but incorporated internationally and listed on the HK Stock Exchange
- H-Shares: companies based in China that are listed on the HK Stock Exchange or other foreign exchange
- ADR – American Depository Receipt: equities that are traded in the US but represent a specified number of shares in a foreign corporation