HSBC Bank International has introduced a fund of funds that can be tailored to suit different risk profiles.
This offshore fund of funds aims for capital growth through adventurous, balanced and cautious portfolios. Free switching between the portfolios is allowed and each portfolio consists of between 15 and 35 funds.
The cautious portfolio is designed for investors who with a lower risk profile. Fixed-interest funds make up 70 per cent of the portfolio, while 30 per cent goes in equities.
The balanced portfolio is intended for investors with a higher risk profile than the cautious portfolio, so its portfolio is dominated by equities, with just 30 per cent going into fixed-interest funds.
The adventurous portfolio adopts a more aggressive strategy and is for investors who are prepared to take high risks over the long term. It invests entirely in equities, with 55 per cent of the portfolio going into the US.
Funds of funds appeal to investors who understand that no fund management group can offer the best funds in all areas at all times. This lack of consistency is compounded by the fund management roundabout, which has seen high profile managers such as George Luckraft and Nigel Thomas recently leave ABN Amro to join Framlington.
Select, which has a minimum investment of £5,000, joins the growing band of products which bring the benefits of funds of funds to those with lower amounts to invest. However, the initial charge is high at 5.25 per cent and additional charges are incurred by investing in the underlying funds.