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HSBC aims for 10% return with hedge offering

HSBC is to offer a new global fund of hedge funds to the retail market from next month through its international banking division, HSBC Republic.

The HSBC global absolute fund will be a closed-end Guernsey-incorporated fund listed on the London Stock Exchange and targeted at IFAs and their clients.

Shares are available in either dollars or sterling.

The fund, which will close to subscriptions on October 18, will invest in around 20 to 30 hedge funds worldwide with the aim of achieving returns over 10 per cent a year at low levels of volatility.

The fund will be managed by the same team which runs HSBC Republic&#39s European absolute fund of hedge funds, launched earlier this year.

The new fund has a front-end charge of 1.5 per cent and an annual fee of 1.7 per cent of net assets. There is also a performance fee linked to Libor.

Minimum investment per intermediary is $50,000 or £35,700. Commission is 3 per cent initial and 0.5 per cent trail.

HSBC Republic chief executive Paul Dunning says: “With a low minimum entrance level, we believe that, through a diversified portfolio of leading hedge funds, HSBC global absolute will reduce the risk associated with single fund investment.”

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