HSBC Global Asset Management has launched the HSBC GIF Global Macro II Fund, a levered version of the group’s flagship absolute return portfolio, the HSBC GIF Global Macro Fund.
The HSBC GIF Global Macro II Fund, like its sister portfolio, is a Ucits III, Luxembourg-domiciled Sicav offering daily liquidity.
Launched on 18 June 2007, the HSBC GIF Global Macro Fund has been co-managed by Guillaume Rabault and Jim Dunsford since inception. Both Rabault and Dunsford will be responsible for the new fund.
The macro investment strategy of the HSBC GIF Global Macro II fund is identical to the original portfolio. Investing in a wide variety of liquid asset classes including cash, equities, bonds and currencies worldwide, the fund seeks to exploit pricing anomalies using complementary quantitative and qualitative based strategies.
Rather than gearing up in a conventional sense, the HSBC GIF Global Macro II portfolio will be constructed by doubling up all positions of the existing version. Given the fund’s focus on highly liquid markets, the creation of the levered version is also able to provide daily liquidity.
The management team aims to deliver stable absolute returns with minimal correlation to major asset classes. The return target is Euribor1M +1200 bps with an annualised volatility of 15 per cent – twice the current volatility budget of the HSBC GIF Global Macro Fund.
The strategies that Rabault and Dunsford employ in both funds can be either market-neutral exploiting valuation differences across a given asset class or directional. The team also analyses cross-asset class opportunities as well. Exposure to the different asset classes is primarily achieved by taking long and short positions in financial derivative instruments (such as equity futures, options, bond futures, credit default swaps, currency forwards and non-deliverable currency forwards).
Charles Robinson, head of alternative distribution, HSBC Global Asset Management, says: “This launch is very simply driven by client demand. Investors praise our team for their distinguished process and performance. But many macro investors seek higher returns and can stomach greater volatility so our base strategy is too conservative for these particular individuals to meet their needs. As we have prior experience in adjusting our capabilities to meet different return objectives, we were happy to engineer the same solution in our flagship Ucits III strategy.”