Called the Retirement Range, it will consist of three risk-rated multi-asset portfolios – cautious, balanced and dynamic – drawn from the bank’s existing fund range, which was first launched in 2009 and is currently sold in more than 20 markets worldwide. The full World Selection range had assets under management of £7.7bn ($11.75bn) at December 2014.
HSBC believes that since the UK government announced a radical package of pension reforms in last year’s Budget aimed at giving consumers more choice and flexibility over their pension savings, DC schemes have been looking to find new funds that are more tailored to their member’s needs.
The government’s reforms swept away the requirement on investors to purchase an annuity at retirement and effectively turned pension accounts into another tax efficient savings vehicle from which investors can save and, after age 55, withdraw monies according to their own needs.
The three funds offered in the newly-launched HSBC Retirement Range will have an annual management charge of 0.25%, while ongoing charges are targeted between 0.46% and 0.53% depending on the underlying asset mix. The charges have been set to fit within the 0.75% charges cap set by the government as part of its pension reforms.
Stuart White, head of institutional, UK at HSBC Global Asset Management said the three funds in the Retirement Range offered a simple, value for money option aimed at DC members looking to build up their savings as they plan for retirement.
The investment team behind the range aim to smooth investor’s exposure to market fluctuations and provide a better risk-adjusted return when compared with single asset investments such as equities or UK government bonds.
Caroline Hitch, head of wealth portfolio management and who is responsible for the Range, said HSBC’s established institutional-style investment approach was highly suited to the needs of pension fund trustees and DC scheme members.
“The World Selection portfolios offer dynamic asset allocation, cost effect portfolio construction and a robust investment process,” Hitch said.
