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James Williams, news editor, Hedgeweek

HSBC and Four Capital Partners launch India fixed income and defensive equity UCITS funds…

InfraHedge, a managed account infrastructure platform and a subsidiary of State Street, has been selected by Milltrust International Group to launch its Emerging Markets Managed Accounts (EMMA plc) platform Hedgeweek reported this week. The platform, a Dublin-domiciled UCITS umbrella structure, will select best-of-breed managers in high-growth emerging markets according to Milltrust International, and has launched with three sub funds; these include Bank Itau, BTG Pactual and Value Partners. Akshaya Bhargava, chief executive of InfraHedge said: “The flexibility of our platform infrastructure and our ability to work with multiple fund managers dealing in multiple markets made InfraHedge an ideal fit. We are delighted to have been chosen to help Milltrust create a truly innovative investment platform for their clients.”

Simon Hopkins, chief executive of Milltrust International Group, added: “Our aim is to offer an alternative to the single manager global emerging markets funds that today dominate emerging markets investing. We found the integrated nature of the InfraHedge offering compelling as it seamlessly combines custody, fund administration and investor services across multiple accounts within a single platform.

London-based manager Four Capital Partners is to launch a Dublin-domiciled fund to target defensive companies
able to withstand market volatility reported Citywire Global this week. The Stable Global UCITS fund is to launch next month alongside an USD50million segregated account. Colin McQueen, head of global equities at the firm and the fund’s lead manager was quoted as saying: “The focus of the Stable Global strategy is to deliver attractive, above inflation returns but with much lower volatility and downside risk than the wider equity market.” He said the portfolio would focus on the “most stable” parts of the equity market and consist of companies with the most robust businesses and strong balance sheets.

The fund will target a real return of minimum 8 per cent by investing in dividend-paying companies over an average time period of three years. Even though the portfolio has somewhat of a bias towards US and UK stocks, the mandate is not driven geographically and has the ability to invest globally. Justin Maloney and Stephen Walker, both of whom currently manage the Four Active Global Income & Growth fund, will act as co-managers to the new fund.    

Sticking with the fund launch theme, HSBC Global Asset Management this week announced the launch of the HSBC GIF India Fixed Income Fund. The UCITS fund is believed to be first-in-class in what is traditionally a difficult market for foreign investors to access. The fund will invest primarily in domestic government and corporate bonds denominated in the Indian rupee. Gordon Rodrigues, who heads up Asian rates, FX and liquidity, is to be the lead manager. In total, the Asian fixed income team, which operates out of a number of investment offices from Mumbai and Hong Kong, to Taipei and Shanghai, comprises 22 managers and seven analysts. Collectively, the team manages approximately USD30billion in Asian fixed income.

Rodrigues said that several factors make the Indian fixed income market attractive to investors. Firstly, the Indian bond market has one of the world’s highest yields; average gross yield in Indian government bonds is 8.38 per cent according to the HSBC Asian Local Bond Index. Secondly, the Indian rupee is one of the most undervalued global currencies based on the Purchasing Power Parity (PPP) indicator. The fund will join HSBC’s Luxembourg-based Global Investment Fund range. Andy Clark, Head of Wholesale, EMEA, was quoted as saying: “The launch of the Indian fixed income fund reflects HSBC's ability to combine vast expertise and local presence to offer clients exposure to interesting and innovative asset classes.

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