TheHSBCWorld index range comprises three funds that cater for cautious, balanced and dynamic risk profiles. They invest globally across equity and bond markets, as well as alternative investments such as commodities, private equity and property, but hedge funds will not be included. The funds will invest directly in some asset classes such as UK gilts if felt to be appropriate.
The funds are available in three share classes. Income and accumulation shares are allow for IFAcommission, while X shares have a charging structure that is free fromIFAcommission, with no initial charge and a lower annual charge than the income and accumulation share classes.
Defaqtoinsight analyst for funds Fraser Donaldson points out that equity exposure reduces while fixed income exposure increases the higher the funds are on the risk spectrum. He says: “The portfolios are competitively priced and availableto intermediaries and non-advised clients, via the retail X share class with a clean fee annual management charge of 0.5 per cent and zero initial charge. HSBCwill also make use of their own in house HSBCindex tracking funds where available to keep costs down. Where this is not possible they will use products from other investment managers.
“These portfolio funds will appeal to advisers whose clients are concerned about the expense of active fund management and attracted by the low annual management fees. However, while the costs are low it should be recognised that this is being achieved in the main by the use of HSBC’s own index tracking funds, which may be a cause for concern for some.”