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Global return from HSBC

HSBC Investments: Openfunds

HSBC OpenFunds Global Return Fund

Type: Oeic fund of funds

Aim: Growth and income by investing globally in fixed income, equities, property and commodities through other investment funds

Minimum investment: Lump sum £1,000, monthly £50

Investment split: 33% equities, 33% fixed income, 34% alternative asset classes including global property, funds f hedge funds and private equity

Isa link: Yes

Pep transfers: Yes

Charges: Initial 4%, A shares annual 1.25%, B shares 1.5%

Commission: Initial up to 4%, renewal A shares annual 0.5%, B shares 0.75%

Tel: 0800 181890

Bright Financial Services sales director Paul Breaks defines this fund as a global distribution fund with added spice. He says: “HSBC Openfunds is a fund of funds proposition. Funds within the range are designed for use by advisers either as “single strategy solutions” or as part of a broader portfolio. The Open Global Return Fund is designed for capital growth though income units are available.”

Breaks points out that the fund will invest in a broad range of asset classes across global markets including up to one third in non traditional assets such as global property, hedge funds, currency, commodities and Private Equity. “HSBC see it as part of the Balanced Managed sector. The charges are 4 per cent initial with a 1.25 per cent,” says Breaks.

However, on the downside, Breaks says he is generally sceptical about products from a banking group. “I’m not comfortable putting a first time investor into something that includes hedge funds and private equity. It would certainly put a few extra pages on the reason why letter,” he says.
In Breaks’ view, the competition will come from fund of fund providers including Fidelity, Jupiter and New Star.

Summing up Breaks says: “Having a possible third of the assets in “non traditional assets” is new for such a product. Of course this also increases the volatility, whatever HSBC might say. I would perceive it as more suitable for a sophisticated investor as part of an overall portfolio.”

BROKER RATINGS

Suitability to market: Good

Investment strategy: Good

Charges: Good

Adviser remuneration: Average

Overall 7/10

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