The HSBC Global Investment Funds – China Consumption Opportunities Fund will invest in both domestic Chinese stocks and also the equities of global companies benefiting from China’s consumption.
HSBC said the fund will tap into the continued growth of the Chinese domestic market – particularly the growth in the country’s consumption which is forecast to overtake that of the US by 2020.
China’s luxury market, for example, is predicted to grow from $13bn to approximately $106bn, with corporate earnings for the sector in 2011 having been revised up by over 30% since 2010. Meanwhile, earnings growth for consumption staples are expected to be in the region of 24% for this year.
HSBC said the fund will invest in a diversified portfolio of mid to large cap companies from both global and local Chinese consumption brands and will invest in sectors including automobile, electronics, sports & apparel, fashion & cosmetics, food & beverage, department stores and jewellery & watches.
Available in both Hong Kong and US dollar denominated shares, the fund’s initial public offering will run until 23 September. The minimum investment in the fund is either US$1,000 or HK$10,000.
Bruno Lee, HSBC’s regional head of wealth management, retail banking & wealth management, Asia Pacific, said: “China has been a favourable investment destination for many Hong Kong investors. Apart from investing in a generic Chinese equity fund, investors can consider diversifying their investments into a global portfolio which consists of domestic and international companies to best capture the rising potential of China’s emerging consumption power."
“Despite market volatility, liquidity and valuation continue to support a constructive view for equity investment and market correction may present a buying opportunity for investors who have a long-term positive view towards China’s economic growth and the global recovery.
