Investment Strategies

Improving African, Middle East Economy Prompts New HSBC Fund

Harriet Davies 12 October 2009

Improving African, Middle East Economy Prompts New HSBC Fund

HSBC Global Asset Management has launched its HSBC GIF Middle East and North Africa fund, citing improved world economic conditions and security in the region as reasons for the timing of the launch.

The fund was scheduled to launch in October 2008 but was postponed due to the financial turmoil following the collapse of Lehman Brothers. But in a sign that HSBC GAM now sees global markets as returning to some normality, it now sees fit to launch the fund.

Andrea Nannini, active management specialist at HSBC GAM and manager of the MENA fund, said in a statement that stock prices were still below pre-crisis levels and offered “very compelling valuation levels”.

In a world where the traditional developed nations are facing years of anaemic growth whilst consumers and governments pay off colossal debts, investors are increasingly looking to other parts of the globe, most notably Asia, for returns.

The MENA region overall weathered the financial crisis relatively well, growing by 6.2 per cent in 2008.

The region holds vast commodity wealth, and has been doing an increasing amount of direct trade with Asia over the past few years. In the statement to the press Mr Nannini cited “higher commodity prices, stronger domestic demand and pro-active government policy” as reasons for optimism about the region.

Minimum investment for the fund is $5,000 for the retail share class and $1 million for the institutional share class, with annual management fees of 1.5 per cent and 0.75 per cent for the classes respectively.

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