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HSBC MultiAlpha Japan Equity FundFund Information Sheet
For Professional Advisers only
What are the advantages of investing in MultiAlpha?
1. Our local research network. To truly discover the best for
our clients, we need to be where the investment talent is to
be found on the ground. This is why our extensive research
network has its foundations in the four corners of the globe
through our local presence around the world. Ultimately this
presence encourages understanding, manager discovery and
informs our monitoring
2. Investment rigour. It is the robustness and integrity of our
research and portfolio management process that drives how
we establish and continuously stress test the construction
of our funds and our chosen managers to ensure that we
maintain a consistency of focus on the achievement of
positive risk adjusted results
3. Transparency and risk management. Our ongoing
research gives our analysts day-to-day familiarity with the
managers we invest in. The use of both qualitative and
quantitative monitoring, both on a formal and informal basis
gives us a multiple lens approach to truly understand our
managers and their portfolios. Our process is designed to
ensure that the managers who are strong enough to be
selected continue to invest in a way that remains consistent
with their expertise
Why buy the HSBC MultiAlpha Japan Equity Fund?
‘Best of breed’ blended management style. Creating a
winning team. The three underlying investment managers
provide the fund with our best ideas in the Japanese
equity arena. Their investment strategies and approaches
differ markedly
Flexible portfolio. The underlying managers have been
blended using risk, return, qualitative and quantitative
criteria in order to smooth out ‘peaks and troughs’ that
can occur in an individual approach
Outstanding global presence and local intelligence
in Japan. We can provide top level market intelligence
thanks to the location of our Multimanager regional offices
and specialist teams
Asset allocation and diversification benefits. The fund
can be used as a stand-alone fund or as an actively-managed
building block invested in a region that differs
markedly
from
Western markets. The fund also offers investors with
a smaller sum to invest the means to achieve portfolio
diversification
Access to specialist managers. These managers might
normally only be available to institutional investors (due to
the size of investment required) or they are investment
boutiques that are off the beaten track
Why focus on Japanese equities?
Japan is the world’s second largest economy. It is one of
the most technologically sophisticated economies in the
world, providing foreign investors with high-technology
investment opportunities
Little in the way of sub-prime lending. Within the Japanese
financial services industry, bad debts and weak balance
sheets have been repaired so banks should be able to offer
credit more easily to consumers and businesses
Investors’ appetite for risk is improving. Equities offer
investors a higher risk investment option with the
potential for higher returns than bonds
The investment strategy
A pragmatic approach. We assume that markets will
always be volatile. We focus on qualitative research
and achieving long-term investment goals rather than
being driven by fashions or fads or chasing short-term
performance trends
A blended of our best selection and most complementary
fund managers available. We invest in a selection of global
and boutique investment houses with extensive investment
experience. This approach should allow the fund to perform in
a wide variety of market conditions
Focused, specialist teams. The Multimanager team
believes that the selected managers offer a unique
flavour, providing high quality, specialist research and
analysis which leads to quality investment decisions. Two
of the managers are benchmark indifferent, meaning
their investments will be sourced from a wide range of
opportunities regardless of the index
Well-diversified portfolio. The fund aims to insulate itself
against the peaks and troughs in fund returns by blending
the three managers’ approaches rather than focusing on
a single approach. Manager strategies do not all carry
the same level of risk, so the weight we hold in each is
tailored to ensure the fund has a balanced exposure
Use of cash is unconstrained. The fund manager has
the option of rapid entry into the market when investment
opportunities arise. A cash allocation also offers downside
protection in difficult markets
About the specialist managers selected Nomura Asset Management Co. Ltd. Nomura was
established in 1959 and has a solid track record as one of
Japan’s, and indeed Asia’s, leading asset management firms.
The mandate is managed by Kazuhiko Murota, a fund manager
with a quantitative background and 24 years of investment
experience, well-supported by 30 research analysts who carry
out 5,000 research visits a year, one of the highest numbers of
visits in the local industry. The investment process is made up
of screenings, fundamental company research and some top-
down considerations. Overall, the process leads to a portfolio
which has a bias towards value stocks. On average, there will
usually be about 60 holdings in the portfolio.
Morgan Stanley Asset & Investment Trust Management
(MSAITM). Morgan Stanley is an established asset manager
in Japan. Fund managers Kunihiko Sugio and Daiji Ozawa
manage its Value Strategy with the input from its local and
global research teams, running relatively concentrated, higher-
risk portfolios of Japanese equities, invested for the long
term. As a result of taking a qualitative approach, the portfolio
holds a small number of not-typical value stocks.
The portfolios only have about 10-20% of stocks changed per
year. Attractively-valued stocks are identified as investment
candidates and analysts conduct extensive research on these
stocks to identify the most suitable investment opportunities.
The managers are prepared to follow their research strongly,
which leads to portfolios which have the tendency of large
sector deviations versus sector allocation in the benchmark
index.
Polar Capital LLP. Polar Capital established their Japanese
investment team in 2001 when James Salter, a Japanese
specialist manager, joined them. The team was strengthened
in London by the addition of fund manager Gerard Crawley
in 2005 and enhanced by the addition of research analysts
Toshio Konishi and Masahiko Komatsu, who joined Polar
Capital in 2006, and are based in Tokyo. The portfolio is
built with macro-views reinforced by local bottom-up stock
research. There is a slight bias towards small capitalisation
stocks in the portfolio. There may also be a slight value bias
within the stocks selected, which usually number about 50.
The fund manager would occasionally conduct short-term
trades.
Underlying Manager Breakdown (as at 31 December 2009)
Atsuhiko joined HSBC as a Senior Investment Manager, Tokyo in June 2007. His main responsibilities include being in charge of Multimanager funds covering Japan and is General Manager Investment Division of Tokyo Office. Prior to joining HSBC, Atsuhiko was Head of Active Equity for Credit Agricole covering fund management of Japanese Equity Products. Atsuhiko started his career at Morgan Grenfell as an Investment Banking officer mostly in charge of Mergers and Acquisitions advisory business for London and Tokyo. Prior to joining Credit Agricole Atsuhiko was a Senior Portfolio Manager for Japanese Equity Products (Large Cap) at Daiwa SBI. Atsuhiko has over 19 years experience in the Investment industry. Atsuhiko holds an MBA from The Wharton School, University of Pennsylvania, USA and a BA Economics from Keio University, Japan, he is also a Chartered Financial Analyst Charterholder.
Fund manager – Atsuhiko Masuda
With mountains covering 80% of its land area and heavy winter snowfall, Japan is a nation of winter sports fanatics. It has the distinction of being the only Asian country to host the Winter Olympics (most recently in 1998 in Nagano) and boasts 32 Winter Olympic medals. Bobsleigh is a spectacular high speed event, with bobs driven by a four man team to speeds of 40km/h, before being steered round the course at speeds peaking above 200km/h.
Fund details (as at 31 December 2009)
Nomura Asset Management Co. Ltd.
40.36%
Polar Capital LLP 30.38%
Fund manager Atsuhiko Masuda
ISIN code LU0358927886
Base currency USD
Fund size in millions USD 105.4
NAV (distribution shares) 8.68 USD
Minimum investment horizon > 5 years
Launch date 7 July 2008
Benchmark 100% TOPIX (RI)
Morgan Stanley Asset & Investment Trust Management
29.26%
HSBC International Select Funds disclaimer. HSBC International Select Funds (HISF) are sub-funds of HSBC International Select Funds, a Luxembourg based SICAV (Société d’Investissement á Capital Variable) regulated by the CSSF. The funds mentioned in this document may not be registered for sale or available in all jurisdictions. For available funds please contact your local HSBC office. HSBC International Select Funds cannot be sold by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such an offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. All applications are made on the basis of the current HSBC International Select Funds Prospectus, simplified prospectus and most recent annual and semi-annual reports. These can be obtained on request and free of charge from HSBC Global Asset Management (UK) Limited or the local distributors. The value of investments may go down as well as up and you may not get back the full amount you invested. Where overseas investments are held the rate of exchange may cause the value of investments to go down as well as up. Markets in some countries can be described as ‘emerging markets’. Some of these may involve a higher risk than where an investment is within a more established market. Where a sub-fund invests predominately in one geographical area, any decline in economic conditions may affect prices and the value of underlying investments. The securities representing interests in the HSBC International Select Funds have not been and will not be registered under the US Securities Act of 1933 and will not be offered for sale or sold in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or United States person, except in a transaction which does not violate the Securities Law of the United States of America. This document was produced by HSBC Global Asset Management (UK) Limited for distribution in the Middle East and North Africa region by HSBC Global Asset Management MENA, who are marketing the product in a sub-distributing capacity on a principal – to – principal basis. HSBC Global Asset Management MENA, is a unit that is part of HSBC Bank Middle East Limited, PO Box 66, Dubai, UAE, which is incorporated and regulated by the Jersey Financial Services Commission. Services are subject to the Bank’s terms and conditions. HSBC Bank Middle East Limited is a member of the HSBC Group. HSBC Global Asset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ, UK, is authorised and regulated in the United Kingdom by the Financial Services Authority and registered as number 122335. © Copyright. HSBC Global Asset Management 2010. All Rights Reserved.The information provided has not been prepared taking into account the particular investment objectives, financial situation and needs of any particular investor. As a result, investors using this information should assess whether it is appropriate in the light of their own individual circumstances before acting on it. The information in this document is derived from sources believed to be reliable, but which have not been independently verified. However, HSBC Bank Middle East Limited makes no guarantee of its accuracy and completeness and is not responsible for errors of transmission of factual or analytical data, nor shall HSBC Bank Middle East Limited be liable for damages arising out of any person’s reliance upon this information. All charts and graphs are from publicly available sources or proprietary data. The opinions in this document constitute the present judgment of the issuer, which is subject to change without notice. This document is neither an offer to sell, purchase or subscribe for any investment nor a solicitation of such an offer. This document is intended for the use of institutional and professional customers and is not intended for the use of private customers. This document is intended to be distributed in its entirety. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. Any transaction will be subject to HSBC Bank’s Terms of Business 17379/0110/MENA
About HSBC MultimanagerOur local research network. The value of global research is
often underestimated because there are not enough good fund
managers around who exhibit a consistently defined skill when
making investment decisions. The world’s truly outstanding
investment managers are to be found in far flung places because
technology has improved information flows making it possible to
be based anywhere in the world. To truly discover the best for our
clients, we believe that we need to be where the investment talent
is to be found on the ground. We are committed to research and
have invested heavily in our network of 40 investment specialists
situated in 12 locations around the globe.Ultimately this presence
encourages understanding, aids manager discovery and informs our
monitoring.
Investment rigour. It is the robustness and integrity of our
research and portfolio management process that drives how we
establish and continuously stress test the construction of our funds
and chosen managers, ensuring that we maintain a consistency of
focus on the achievement of positive risk adjusted results. Every
one of the strong managers we invest in is subject to ongoing
assessment to justify their continued inclusion relative to the new
and exciting managers and investment opportunities uncovered by
our research process.
Transparency and risk management. Our ongoing research
gives our analysts day-to-day familiarity with the managers we
invest in. To know our managers inside out we use both qualitative
and quantitative monitoring, both on a formal and informal basis to
give us a multiple lens perspective. Our approach fosters a stock
level understanding of the dynamics within our portfolios and is
designed to ensure that the managers who are strong enough to
be selected continue to invest in a way that remains consistent
with their expertise. We must not only identify good managers
but specifically those whose approaches and sources of skill are
differentiated.
HSBC Multimanager teamPhilip GlazeGlobal Chief Investment Officer and Global Head of Research
Joanna MunroGlobal Chief Executive Officer
EMEA MultimanagerRaphael Sobotka Chief Investment Officer, Europe
Product specialistAlasdair Prescott: [email protected] Tel. + 44 (0) 207 024 0682
Asia MultimanagerJames Hughes Head of Multimanager, Asia Pacific/ Head of Business Development
Product specialist Emily Ho: [email protected] Tel. +852 2284 1165
Americas MultimanagerLane PrenevostHead of Multimanager, Americas
Product specialistRahul Khasgiwale: [email protected]. +1 (1) 4416 868 1556
Product specialistJuan Pablo Scasserra: [email protected]
HSBC MultiAlpha range – next stepsYou can contact our investor services team on +44 (0) 20 7992
4172† or alternatively e-mail us at [email protected]
Lines are open from 9am-5pm Monday to Friday (excluding public
holidays). Contact details for the transfer agency in Luxembourg,
who undertake all administration of the HSBC MultiAlpha Fund
range are:
RBC Dexia Investor Services SA
14, rue Porte de France
L-4360 Esch-sur-Alzette
Grand Duchy of Luxembourg
Telephone Number 00 352 2605 9553
Fax Number 00 352 2460 9500
