HSBC’s BRIC freestyle fund re-opened

HSBC Investments has reopened its GIF BRIC Freestyle fund to investors.

The highly successful fund was enjoying strong inflows prior to June 2006, when it was temporarily closed to new investment to protect performance for existing share holders. The fund is managed by Halbis, the ‘fundamental active’ asset management specialist of HSBC.

Christian Deseglise, Global Head of Emerging Markets Business at HSBC Investments, said: “Over the past eight months, the markets in which this fund invests have grown in size and liquidity, and depth has improved. This has increased capacity to a level whereby it is now appropriate to re-open the fund. We will continue to watch the capacity issues closely and are fully prepared to close the fund again to protect clients’ interests.”

With US$2.7 billion of assets, the HSBC GIF BRIC Freestyle fund is one of the world’s largest actively managed funds dedicated to investing in the Brazil, Russia, India and China (BRIC) markets. The fund is part of HSBC’s Luxembourg-domiciled Global Investment Funds (GIF) SICAV, which has UK distributor status and is registered for sale in over 30 countries around the world. As the name suggests, the fund is managed without benchmark constraints. The minimum investment is US$5,000.

Halbis has an expert multi-country team responsible for the management of the GIF BRIC Freestyle portfolio, including Luiz Ribeiro and team in Brazil, Sanjiv Duggal and team in India, and Richard Wong and team in Hong Kong. Halbis also benefits from the advice of Hermitage, an expert on Russian investments. Collectively these country teams are responsible for stock selection. They also provide input to the overall asset allocation of the fund, which is ultimately determined by Nick Timberlake, the lead Halbis fund manager based in London along with the rest of his global emerging markets equity team.
Launched in December 2004, the fund has posted a 101.53% gain over the period from 31 December 2004 to 30 March 2007, in dollar terms on a bid to bid basis with gross income reinvested, according to figures provided by Standard & Poor’s. At the end of March 2007, the fund had 28% of its assets in Brazil and in Russia, 17.5% in India and 20% in China. The cash position was 6.5%.

Deseglise said: “The outlook for BRIC markets and the fund remains positive. Global growth and liquidity remain supportive, whilst macro economic conditions in BRIC markets are robust. Domestic demand in the BRIC economies is growing, providing solid support for many equity sectors. Valuations remain attractive but are trending higher. All of this indicates that the BRIC story is even stronger than before. We are confident that these markets will deliver good returns over the long term.”