HSBC Managed Solutions (An open ended Fund of Funds Scheme) Create Wealth Through The Right Mix

Transcription

1 HSBC Managed Solutions (An open ended Fund of Funds Scheme) Create Wealth Through The Right Mix April 2017

2 3 reasons to invest in HSBC Managed Solutions 1. Different asset classes perform differently across various time periods and an astute mix of assets helps in creating long term wealth 2. Active allocation across asset classes like equities, fixed income, gold, international funds, etc. helps reduce portfolio volatility 3. Dynamic re-balancing of investment portfolios helps alignment to investors financial goals 3 benefits of investing in HSBC Managed Solutions 1. Access multiple asset classes through one fund 2. Invest in best-of-breed mutual funds across fund houses through one fund 3. Choose from 3 asset allocation plans through one fund A need-based investment solution that helps you meet your financial goals

3 Why should you invest? Changing social demographics - Rising health care cost, nuclear families, post retirement income, etc Spending needs such as home, car purchase, children education etc. Inflation erodes our money value If you manage your monthly expenses with INR 100,000 today, and if the inflation 8% what will you need in future? There is a high focus towards perceived safe investment avenues - ~41.6% of household savings is expected in physical assets like Gold and Real Estate as per the 12th Five Year Plan ( ). However, asset classes like Equity which tend to outperform other asset classes (Period: , Source: CLSA) form just ~4.5% of household savings. Where should you invest? Equities: Tend to outperform in the long run as they follow corporate earnings Debt: Tend to provide some stability in returns over the medium term; lower risk compared to equities Gold: Can be volatile Real Estate: Comes with risks such as project delays, liquidity concerns, title issues, etc. Commodities: Regulations still evolving, not fully understood by retail investors Different asset classes perform differently at various points in time Hence, an optimal allocation in various asset classes improve chances of achieving better risk adjusted returns over the long term. The importance of asset allocation Asset allocation involves apportioning an investment portfolio among different asset categories (i.e. equities, bonds and liquid) based on investor s risk appetite and time horizon Asset allocation provides greater diversification which in turn helps in reducing risk in a portfolio hence leading to lesser volatility, especially in times of economic upheavals Helps to generate expected return with lower volatility 93.6% of the variability of a fund s average return can be attributed to asset allocation (Source: Brinson et al (1986)) Asset allocation does not ensure a profit or guarantee against a loss - can however, lead to better risk adjusted portfolio returns over time. Why should you consider multi-asset portfolios? Multi-asset portfolios spread investments both across asset classes and across geographies Ensures that the portfolio does not become over-reliant on a single asset class or a single country or sector Asset classes typically have a low correlation - combining assets with low correlations helps reduce overall portfolio volatility HSBC Managed Solutions: A Wealth Imperative Multi-asset (Domestic and Offshore Equity, Fixed Income, Liquid and Gold) portfolios which are actively managed Constructed to optimize risk adjusted returns in keeping with investors risk profile Regular rebalancing of portfolio to ensure alignment to long term investment objectives Offer transactional efficiency to the investor A unique investment solution for Indian investors.

4 HSBC Managed Solutions: Salient Features Construct: Fund Wrapper Fund of Funds feeding into HSBC/Third Party funds* Style: Active Asset Allocation Minimum quarterly review of allocation weights Regular rebalancing for market movements Annual comprehensive review of design principles Benefits Diversification: Domestic Equities/Bonds, Offshore Equities, Alternates Efficient rebalancing Long term solution *For capabilities where HSBC offerings are not available Leveraging HSBC Global Asset Management s expertise HSBC Managed Solutions are discretionary, multiasset portfolios leveraging the HSBC Global Asset Management s multi-asset capability Asset mix is fulfilled in a cost efficient and risk controlled manner Overseen by globally consistent investment governance principles HSBC Global Asset Management has proven capabilities with USD 72.3 bn assets under management in multi-assets (Source: HSBC Global Asset Management as at 31 December 2016) HSBC Managed Solutions Three choices to cater to investor s risk profile Seeks to provide long term total return through active asset allocation Managed Solutions India Growth Primarily invests in equities, with diversification in debt, gold and liquid Managed Solutions India Moderate Primarily invests in equities and debt, with diversification in gold and liquid Managed Solutions India Conservative Primarily invests in debt, with diversification in equities, gold and liquid Key Risks # Operational Risk: Given that the fund of funds (FOF) structure will involve splitting each subscription and redemption at FOF level into multiple subscription and redemptions into the respective funds; there is enhanced operational risk Risk factor associated with Legal, Tax and Regulatory risk Market Risk: The underlying schemes investments are subject to the risks inherent in all investments in securities i.e. the value of holdings may fall as well as rise Liquidity risk of underlying instruments: There could be liquidity risk on account of illiquid underlying holdings Currency Risk: As the underlying scheme could invest in securities which are denominated in foreign currencies (e.g. US Dollar), fluctuations in the exchange rates of these foreign currencies may have an impact on the income and value of the scheme Restructuring/Rescheduling Risk: There could be cases of restructuring/rescheduling of particular debt/money market instruments held in the portfolio which could result in the maturity of these instruments going beyond the original maturity date of the instrument # For more detailed information on the risks associated with this fund, investors should refer to the Scheme Information Document. The investor will bear the recurring expenses of the scheme, in addition to the expenses of underlying scheme.

5 Product labelling Disclaimer: Expressions of opinion are those of HSBC Asset Management (India) Private Limited only and are subject to change without notice. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies that may have been discussed or recommended in this report and should understand that the views regarding future prospects may or may not be realised. Neither this document nor the units of HSBC Mutual Fund have been registered in any jurisdiction. The distribution of this document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. HSBC Asset Management (India) Private Limited, 16, V.N. Road, Fort, Mumbai Issued by HSBC Asset Management (India) Private Limited Investment Manager - HSBC Asset Management (India) Private Limited (HSBC AMC) and offered for sale through various distributors.