HSBC launches two emerging economies funds
EUROPE - HSBC Global Asset Management has launched both a Frontier Markets equity fund and an Emerging Markets Inflation-linked bond fund for European investors.
The New Frontiers Fund will invest in stocks over US$50m (€31.4m) in market cap, from Frontier Markets plus nine ‘cross-over' markets, considered between Emerging Market and Frontier status. These include Egypt, Argentine, Colombia and Pakistan.
The fund will own 60-90 stocks, with no more than 10% in any single name. It may also participate in selective pre-IPO activity. At the start of June, the fund had a regional exposure of 43.5% to the Middle East and a sector weighting of 58% to financials, with just 6% in materials and 10% in energy.
Senior portfolio manager of the New Frontiers Fund, Andrea Nannini, is well-known to Danish investors. He worked for BankInvest in Copenhagen for eight years, heading its Frontier Markets fund since 2005, and before that its Eastern European fund since 2000.
The Emerging Inflation-Linked Bond fund invests in debt issued by nine major emerging countries: Argentina, Brazil, Chile, Colombia, Poland, South Africa, South Korea and Turkey.
Maximum exposure to any country is 25% and the benchmark is the Barclays Capital Emerging Markets Government Inflation-Linked Bonds Constrained Index.
This fund will be managed by HSBC's active quant arm, Sinopia, from Paris.