HSBC launches hedged sterling share class

HSBC Global Asset Management has launched hedged sterling share classes for the HSBC GIF European Equity Alpha and HSBC GIF Global Emerging Markets Equity Alpha Funds, allowing sterling investors to avoid associated currency risk.

The UCITS III absolute return funds were launched in April 2010.

The HSBC GIF European Alpha Equity Fund seeks opportunities - via a market neutral strategy - across developed Europe, implemented primarily through equities and equity swaps.

The investment vehicle, which offers daily liquidity, targets equity-like returns with a maximum annualised volatility target of 10%, with minimal correlation to European equities. The fund is managed by a team of four, with Vis Nayar as lead manager.

Since launch, to the end of August the HSBC GIF European Alpha Equity Fund has achieved 5.6% while the MSCI Europe Index has fallen by 4.19%.

The HSBC GIF GEM Equity Alpha Fund, jointly managed by Omar Negyal and Nick Timberlake, also offers daily liquidity and targets annual returns of 10-15% based on approximately 10% volatility with limited market correlation†. It is a high-conviction long/short portfolio. The investment process is fundamentally driven by a highly disciplined approach to stock picking, using combined profitability/valuation metrics for both long and short equity selection.

Charles Robinson, Head of Alternative Distribution, HSBC Global Asset Management, said: "We launched the hedged sterling share class in response to domestic demand. The UK is a critical market for our UCITS III absolute return platform and we appreciate that currency volatility is a risk investors may wish to neutralise."