HSBC Launches CIVETS Fund
Wednesday, June 01, 2011

HSBC Global Asset Management has launched the first CIVETS fund, which is available to both retail and institutional investors globally.

The HSBC Global Investment Funds (GIF) CIVETS fund targets long-term returns from capital growth and income by primarily investing in a diversified portfolio of equities from the stock exchanges of the CIVETS countries – Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.

The fund, however, also has the ability to invest up to 25% in non-CIVETS nations which have similarly attractive demographics, such as Mexico, Nigeria, the Philippines, Thailand, Malaysia and Saudi Arabia.

Domiciled in Luxembourg, the HSBC GIF CIVETS fund is part of HSBC Global Asset Management's flagship GIF SICAV range, which is registered across more than 30 countries.

"The CIVETS nations, which are among the next generation of emerging markets, echo many of the demographic qualities inherent in larger developing markets such as the BRIC nations," says HSBC Global Asset Management.

Collectively, the CIVETS group has a population of around 600m with an average age of 27 years, representing 8% of the global population.

"Each of the CIVETS countries has a relatively diverse and dynamic economy without the extreme dependence on external demand or commodity exports that characterise some parts of the emerging world," the firm adds. "The countries also have a relatively low level of public debt as well as corporate and household debt."

Sridhar Chandrasekharan, Global Head of Wholesale, HSBC Global Asset Management, said: "HSBC Global Asset Management is already a world leader in emerging markets, with some USD145bn assets under management in this asset class globally (as at December 2010). The launch of a CIVETS fund extends our product range for clients who wish to use our expertise to access these markets."

The HSBC GIF CIVETS fund will typically hold between 40 and 60 stocks. The base currency of the fund is the US dollar. The minimum investment is USD5,000 for retail investors (A-share class) and USD1m for institutional (I-share class). The fund’s annual management charge (AMC) is 1.75 % and 0.875%, respectively.

Target country allocation (for illustrative purposes only, with data as at February 28, 2011) is as follows: Colombia 16%; Indonesia 25%; Vietnam 1.5%; Egypt 7.5%; Turkey 25%; and South Africa 25%.