HSBC China Dragon Fund Retail

HSBC Investments’ launch of an innovative fund that invests in Chinese A shares has closed 27 times oversubscribed from the Hong Kong public offering within the five-and-a half day offer period.

The HSBC China Dragon Fund, a close-ended listed fund that trades on the Hong Kong Stock Exchange, was launched by HSBC Investments in Hong Kong. The global offering, which comprises both the institutional and retail allocations, aimed to raise US$400 million before any exercise of the over allotment option. Initially it was intended that 10% of that amount would be allocated to retail investors. However, given the exceptional demand for the retail allocation – the units have been reallocated so that private investors now have access to 30%. The HSBC China Dragon Fund also received exceptional demand from institutional investors during its offer period.

The HSBC China Dragon fund starts a new chapter in investing in Chinese equities in that it is the first authorised, actively managed close ended fund listed on the Hong Kong stock exchange to hold a full range of Chinese equity shares, including A-shares. A share companies are listed on the Chinese stock exchanges and are currently only available to Chinese mainlanders and selected foreign institutional investors.

HSBC China Dragon can access the A share market through use of its US$200 million QFII (Qualified Foreign Institutional Investor) quota.

HSBC China Dragon is managed by Halbis, the HSBC Group’s active investment specialist arm, with on-the-ground support from the Shanghai-based HSBC Jintrust Fund Management Company.

Mark McCombe, Global Chief Executive at HSBC’s Group Investment Businesses, said: “In addition to demonstrating the strong investor appetite for Chinese equities, this strong response suggests that investors are also attracted by the fund’s innovative features and Halbis’ strong track record in investing in Chinese equities, along with our on-the-ground research capabilities.”

Meanwhile, another innovative fund launched by HSBC Investments, the HSBC MultiAlpha China fund – the first Chinese equity fund offered in Hong Kong using a multimanager approach - raised US$1.1 billion during its initial public offer period in June.

The HSBC MultiAlpha China fund is innovative in that it is the first Chinese equity fund that adopts the multimanager approach.

HSBC Investments manages the fund by selecting high conviction specialists from the industry, determining portfolio allocation and conducting on-going reviews to optimise risk-adjusted returns. Following a rigorous manager selection process, Atlantis Investment Management and Martin Currie Investment Management have been appointed sub advisors of the fund.