HSBC Investments is to move into the global property market for the launch of its third portfolio in the OpenFunds range.
The fund of property funds is set for launch on Nov-ember 26, subject to regulatory approval, and will be positioned alongside its global return and global distribution vehicles.
The portfolio will be managed by HSBC’s real estate, multi-manager team led by Dr Guy Morrell. It will hold 10 to 15 underlying holdings, which will include Reits and bricks and mortar funds. Exposure to Reits will be restricted to a maximum of 80 per cent.
Structured as a non-Ucits retail scheme, the fund is likely to have a large exposure to Continental Europe and Asia and be underweight in the UK at launch.
Morrell says: “UK commercial property has been a highly popular asset class in recent years. However, we believe it is appropriate to take a global approach to property to provide investors with improved diversification and access to attractively priced markets, wherever they may be based.”
HSBC Investments managing director UK wholesale Andy Clark says the company is keen to distinguish this product from the traditional property offerings available to IFAs in the UK.
He says: “We believe that this fund can offer the best of both worlds – the diversification benefits of commercial property investment, without sacrificing liquidity. The fund aims to provide a complementary offering for intermed-iaries, not just another sub-stitute in a world where there are already too many similar products.”
The fund has a minimum initial investment of £1,000, or £50 per month. Initial charge and front-end commission are both set at 4 per cent and annual charge will be 1.25 per cent.