HSBC Global Asset Management has launched a global currency fund aimed at institutional investors, which aims to exploit currency market inefficiencies and imbalances.
HSBC Global Asset Management has launched a global currency fund aimed at institutional investors, which aims to exploit currency market inefficiencies and imbalances.
The HSBC GIF Global Currency Fund invests in a global basket of currencies and targets returns in excess of Libor.
Daily liquidity is offered via a Luxembourg-based US Dollar denominated Ucits III fund, with hedged share classes available in Sterling, Euro, Yen and Swiss Franc. Minimum investment for the institutional share class is USD1m.
The fund is managed by the HSBC Integrated Model Trading team. The team has operated a similar foreign exchange strategy for HSBC since 2004.
Bill Maldonado, head of alternative investments at Halbis, the active management specialist within HSBC Global Asset Management, says the fund introduces a systematically managed multi-strategy approach with a discretionary overlay, with a view to directing allocations to those sub-strategies providing the best returns.
He says the fund thereby could meet market demands from investors switching from single strategy funds to a more wide-ranging vehicle that can dynamically switch between strategies with different investment styles.
The sub-strategies are designed to generate returns in different market conditions, and the fund performance will therefore not be dependent on a market environment in favour of, for example, the traditional carry trade – the practice of borrowing in low-yielding currencies and buying higher-yielding ones to benefit from the risk premium.
The fund will be managed with controlled low volatility taking advantage of full portfolio transparency and daily optimisations to avoid unintended risk concentration.
The fund has an annual management charge of one per cent for the institutional share class. There is a performance fee of 20 per cent above Libor.
