HSBC Investments has set up a multi-asset fund of funds range exclusively for IFAs.
HSBC OpenFunds initially comprises two funds – global return and global distribution, as exclusively revealed by Money Marketing last month, and plans to add another two funds to the range.
Global return focuses on growth while global distribution aims for income and growth. Both funds are structured as non-Ucits retail schemes that can invest in alternative asset classes, including hedge funds and private equity, as well as mainstream assets such as equities and bonds.
The company says that both the funds will be broadly diversified across asset classes but global distribution is likely to have greater exposure to bonds and high-yielding equities, with less exposure to equities in general and private equity.
The funds have a minimum investment of a 1,000 lump sum or 50 a month. The 4 per cent initial charge will be paid in full as commission or can be rebated to investors.
There are two retail share classes, which HSBC says will give IFAs more flexibility in terms of commission.
The A shares have an annual charge of 1.25 per cent, from which 0.5 per cent renewal commission is payable while B shares have a 1.5 per cent annual charge from which 0.75 per cent commission is payable.
James Hughes and Nicholas Pothier, who both joined HSBC from Axa in February, will manage the new funds.
HSBC Investments head of retail Andy Clark says: “”The funds have been designed with IFAs in mind so they will not be a total shock to advisers.
“In countries such as Australia, people are used to funds that offer base rate plus returns rather than benchmarked funds that give clients a rocky road. A few absolute return funds have come out in the UK but we do not think that anyone has launched these funds properly as a core range.”