HSBC Global Asset Management’s open global return and open global distribution funds have achieved top quartile performance at their third year anniversaries and have also been awarded A ratings from Standard & Poor’s Fund Services.
The open global return fund has delivered a net total return of 10.1 per cent over three years to November 30, 2009, while the open global distribution has posted a 4.1 per cent return over the period. The IMA Cautious Managed sector average over the same three-year period was a negative return of 2.2 per cent.
Fund manager Nick Pothier attributes the funds’ performance to their multi-asset, multi-manager approach, which promotes diversification across region, asset class and fund. He has taken long-term positions in themes such as gold, the environment and global emerging markets.
In the open global return fund, Pothier has gained exposure to gold through a physical gold exchanged traded fund and the Blackrock gold & general fund. Gold is seen as a hedge against significant inflation or deflation because it has historically performed well in both scenarios.
The environment is regarded as a strong long-term theme because companies working in the areas of environmentally friendly energy, clean water and waste disposal will benefit from a growing awareness of these issues and the increase in supportive legislation. Pothier has captured this theme through the Impax environmental markets fund, while exposure to global emerging markets has been made through First State global emerging markets leaders and JPM emerging markets alpha plus .
Listed infrastructure has been introduced as a theme into the open global distribution fund through the specialist RARE infrastructure value fund. Pothier says listed infrastructure provides a more predictable income stream than other listed equities, making it more stable and defensive.
He says: “The past three years have certainly been volatile, including both the tail end of an equity bull market and the credit crisis. We expect a multi-asset strategy to achieve relatively smooth returns throughout the cycle, and to provide good capital preservation relative to less diversified strategies, and this is indeed what has been delivered.”