UCITS-compliant frontier markets fund from HSBC

HSBC Global Asset Management has launched a UCITS-compliant frontier markets fund. HSBC's existing Luxembourg-based fund, the New Frontiers Fund and launched before frontier markets were UCITS compliant, will be merged into the new fund.

Aimed at both institutional and retail investors, the HSBC GIF Frontier Markets Fund will be managed by Andrea Nannini, who has run the HSBC New Frontiers Fund since 2008, and is responsible for managing some US$170m in frontier markets’ assets.

The new fund gives retail investors access to markets previously only accessible by institutional investors. Frontier markets are a subset of emerging market nations and include countries such as Qatar, Nigeria, Pakistan, Vietnam, Romania and Argentina. What these markets have in common, says HSBC, is they are all typically at an earlier stage of economic, political and financial development, offering potentially higher growth rates and returns over the long term, albeit with a higher risk profile than traditional emerging market nations.

Andy Clark, Head of Wholesale, EMEA, HSBC Global Asset Management, said, “The HSBC GIF Frontier Markets fund gels well with HSBC Global Asset Management's objective of being the world's leading manager and distributor of emerging market products. HSBC's research forecasts that by 2050 the collective size of the economies we call ‘emerging markets' will increase five-fold and will be larger than the developed world, with 19 of the 30 biggest economies being from the emerging world."

The fund is a long only fund and is benchmarked against the MSCI Frontier Markets Capped Index. The minimum investment for retail investors (A class) is US$5,000 and there is an annual management charge of 1.75%.

The HSBC GIF Frontier Markets Fund is currently awaiting regulatory approval in the UK.