HSBC Asset Management (HSBC AM) has launched two new emerging market index funds offering UK investors exposure to fast-growing equity markets.
The funds are the HSBC MSCI Emerging Markets Equity Index and the HSBC MSCI Emerging Markets ex-China Equity Index funds.
Both funds have received seed investment from MPS provider Tatton Investment Management.
The HSBC MSCI Emerging Markets Index fund provides access to a standard market-cap weight index, capturing large- and mid-cap representation across 24 emerging market economies and covering approximately 85% of the free float-adjusted market capitalisation in each country.
The HSBC MSCI Emerging Markets ex-China fund provides investors with the ability to manage their emerging market equity exposure separately to their China equity exposure. the group said this should give investors more options to express their views and manage risk in a more granular fashion.
Both funds incorporate a thermal coal screen, excluding companies engaged in thermal coal-related activities.
The introduction of the new strategies reflects growing investor demand for greater diversification in the context of heightened concentration risk in US large-cap indices, as well as demand for more country-level opportunities as investors look to manage increased uncertainty and stock dispersion, said HSBC AM.
Today’s additions to HSBC AM’s fund suite follow the recent launch of its UK-domiciled S&P 500 Equal Weight Index fund, which aims to allow UK investors to mitigate index concentration risk in US large-cap equity benchmarks by offering diversified access to US equities. Launched in October 2024, the fund recently passed $600m in AUM.
Bhavick Patel, head of UK ETF and indexing sales at HSBC Asset Management, said: “As part of our increased efforts to help clients add emerging market exposures to their portfolios and to build on our strong track record in this space, we are pleased to introduce the HSBC MSCI Emerging Markets Equity Index fund and the HSBC MSCI Emerging Markets ex-China Equity Index fund.
“Both strategies are a natural extension of our commitment to delivering innovative solutions for clients and aim to provide UK investors with access to some of the world’s most dynamic markets, while addressing demand for greater diversification and granular country-level risk-taking, with the HSBC MSCI Emerging Markets ex-China Equity Index fund also allowing investors to better capture regional nuances.”
Both funds are available to institutional and wholesale investors in the UK.
See also: Track to the future – with HSBC Asset Management’s Dan Rudd