HSBC Launches Low-Cost Passive Portfolios

The portfolios contain index trackers and exchange traded funds to keep annual costs down

Editor, Europe
Reviewed by: Rachael Revesz
Edited by: Rachael Revesz

HSBC Global Asset Management (GAM) has launched three multi-asset funds which contain low-cost, passive vehicles.

The HSBC Global Strategy portfolios are risk-targeted and span from cautious to balanced and dynamic, with annual fees of between 0.17 percent and 0.20 percent.

Phil Reid, head of wholesale UK, at HSBC GAM, said the portfolios have active asset allocation to move between equities, bonds and property across developed and emerging markets.

“We believe that the range fits well with clients’ requirements for simple cost-effective products that provide risk-focused asset allocation across global markets,” he said.

HSBC carried out research that found 74 percent of independent financial advisers (IFAs) said they looked at multi asset funds for their ability to offer lower fees. The portfolios will contain passive funds, with the flexibility to use active funds, to keep costs low.

The funds will be available on advisory platforms from 16 October. HSBC hasn’t launched an ETF since the summer of 2014, when it brought to market a fund that replicated the value of countries’ economic footprint rather than market capitalisation, closely followed by a global equities ETF which weights by market cap.

Year to date HSBC has lost €577 million from its ETF range and currently holds 1.2 percent of European ETF asset share.

In May HSBC spoke out against the liquidity constraints of emerging market and frontier ETFs, and advised investors to look elsewhere for yield.

Rachael Revesz joined in August 2013 as staff writer. Previously an investment reporter at Citywire, she has a background in writing content for retail financial advisors and has covered a wide range of subjects in finance. Revesz studied journalism at PMA Media, which has since merged with the Press Association. She also holds a B.A. in modern languages from Durham University, as well as CF1 and CF2 financial planning certificates from the CII.