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Door reopens on HSBC Bric

HSBC Investments has reopened its GIF Bric Freestyle fund to investors following its temporary closure last June to protect performance for existing shareholders.

The company says the markets in which the fund invests have grown in size and liquidity over the past eight months. This has eased the capacity problems, enabling the fund to accept new money.

The fund was launched in 2004 and aims to provide growth and income by investing in equities and equity equivalents in Brazil, Russia, India and China.

The portfolio is concentrated and managed by HSBC subsidiary Halbis in a way that is free from the constraints of benchmark weightings. Stocks are selected using a combination of top down asset allocation and bottom up stockpicking, with no market cap restrictions.

The overall responsibility for the fund lies with London-based lead manager Nick Timberlake. He decides on asset allocation but receives input from other managers based in Bric regions, who are responsible for stock selection. Luiz Ribeiro and his team are based in Brazil, Sanjiv Duggal and his team are based in India while Richard Wong and his team are based in Hong Kong. Halbis also benefits from the advice of Hermitage, an expert on Russian investments.

According to HSBC, the outlook for Bric markets is positive in the long term as a result of global growth, liquidity and growth in domestic economies. It is focusing on stocks that appear to have been oversold after the market correction in February.

One view of Bric funds is that the regions they focus on are a good combination as growth in India and China is increasing demand for energy and commodities produced by Brazil and Russia.

However, another view is that the Bric label acts as a constraint in that the fund manager must have exposure to them all, even if the performance of one or two of the regions lags behind the others. Some investors may prefer wider emerging markets funds, which have more flexibility in term of the regions in which they invest.


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