The fund invests in mid to large cap global companies with significant revenues in the luxury sector and consumer discretionary sectors.
HSBC Mutual Fund announced the launch of its open end fund of fund called HSBC Global Consumer Opportunities Fund. The fund will invest in HSBC GIF China Consumer Opportunities Fund, a Luxembourg based fund.
In a press release, Puneet Chaddha, Chief Executive Officer, HSBC Global Asset Management, India said: “The strategy allows Indian investors to diversify their investments outside of India through an exciting thematic strategy that can invest across the globe. China continues to be the fastest growing major economy of the world and the Chinese consumer behavior acts as a good barometer on how global consumption-oriented companies would fare.”
The fund seeks to benefit from the growth in global consumer purchasing power, driven by the rise of the emerging consumer - a long term secular trend. “As economies develop, rising consumption by the middle class should provide impetus to consumption driven growth and the fund looks at the Chinese consumer as a test guide. Brands are critical in building trust and the fund is currently investing mainly in global brands. This fund has the flexibility to adapt to changing consumption patterns,” said the press release.
Ben Hubbard is the fund manager of the underlying offshore fund and the local fund of fund scheme will be managed by Anitha Rangan and Sanjay Shah.
Yasmina Marie Slimani, CFA, Product Specialist, HSBC Global Asset Management, UK said: “The rise in emerging consumer purchasing power is a long-term secular trend, hence a long-term investment there, and we look at the Chinese consumer as a proxy. China is the second largest economy behind the US and it is entering a golden age of consumption growth, which is supported by the government’s goal of transition from an investment-driven to a consumption driven economy. The expansion of the middle class, urbanization and rising income levels in emerging economies will support the increase in the emerging consumer purchasing power. Brands are critical in building trust and as consumption rises, this should benefit global brands. The fund is diversified geographically as well as within consumption categories, income bands and has the flexibility to adapt to changing consumption patterns. This makes this strategy an interesting proposition for an Indian investor to consider.”
Benchmarked against MSCI AC World Index, the underlying fund invests in mid to large cap global companies with significant revenues in the luxury sector as well as consumer discretionary and staples sectors that have appeal and recognition by Chinese consumers, states the scheme information document of the fund. Some of the largest holdings of the underlying fund (HSBC Global Investment Funds (HGIF) China Consumer Opportunities Fund) were Apple, Volkswagen, Nike, Ralph Lauren, Nestle, Tiffany, among others.
The underlying fund has underperformed its benchmark MSCI AC World Index over 1 year, 3 year, and since inception.
Performance of HSBC Global Investment Funds (HGIF) China Consumer Opportunities Fund
|
Perform |
Underlying scheme |
MSCI World AC Index |
|
1 year |
2% |
9% |
|
3 year |
14% |
15% |
|
Since inception |
54% |
67% |
|
Source : scheme information document |
||
The HSBC Global Consumer Opportunities Fund opens for subscription on February 02 and closes on 16 February. The minimum investment amount is Rs. 5,000 and Rs. 1,000 per month through a systematic investment plan. The fund does not attract any exit load.
