HSBC Global Asset Management slashes charges across index tracking range

Published: 29 June 2009

HSBC Global Asset Management is to cut the annual management charge across its UK-based index tracking fund range to 0.25 per cent. The move applies to seven funds (1) and means HSBC now offers the biggest index tracking range for retail investors, at a market leading price (2).

The new charging structure is available for investments as low as GBP1,000 lump sum or GBP50 regular savings. The reduced charges apply to new and existing investors and takes effect from 1 September 2009. There is no initial charge.

Andy Clark, Managing Director - Wholesale, HSBC Global Asset Management (UK), said HSBC is committed to allowing advisers full access to these reduced charges and has worked hard with major fund supermarket platforms to ensure these savings are passed on.

He added: “HSBC already boasts a major competitive advantage in this area due to our large and established quantitative capability (3) and a 20-year track record in index tracking. Now, with simple standardised clean pricing across the whole range for all investors, HSBC plans to cement its position as a leading provider of beta by providing a high quality product at the right price.”

The revamped range does not pay commission, so is likely to appeal to the growing base of fee-based advisers. Clark said the move also recognised that the Retail Distribution Review would create the need to develop factory gate pricing consisting of a clean fee and advice fee.

He said: “The significant shift in fees on our index range places HSBC at the forefront of a new era in pricing.”

The revamping of HSBC’s index tracker range also offers a clear price differential between active and passive solutions. The HSBC range of regional and country funds focuses on efficient developed markets, which are most relevant in helping advisers to construct portfolios that offer exceptionally good value to clients.

“We see these lower-cost trackers taking a bigger slice of the wealth management market, as low cost beta takes a bigger role at the core of an investment portfolio. While the debate between active versus passive rages on, we believe there is a clear role for both in all clients' portfolios.”

Media enquiries to:

Jenne Mannion 44 0 20 7024 0444 or at e-mail Jenne.mannion@hsbc.com

Jane Crookbain 44 0 207 024 0412 or at e-mail Jane.crookbain@hsbc.com

Notes to editors:

1.  

   Index fund	Previous AMC	New AMC	Predicted new TER
   FTSE 100	1%	0.25%	0.27%
   FTSE 250	0.75%	0.25%	0.27%
   FTSE All Share	0.50%	0.25%	0.27%
   American Index	1.00%	0.25%	0.28%
   European Index	1.00%	0.25%	0.32%
   Japan Index	0.50%	0.25%	0.29%
   Pacific Index	0.75%	0.25%	0.37%

   
   

2. HSBC index tracking funds, will from 1 September 2009, have an AMC of 0.25 per cent. Although there are other companies offering trackers at this cost or lower, it is not across a wide range. Some other providers are cheaper than 0.25 per cent however this is generally for institutional share classes only or they may have additional charges such as purchase fees or registration fees. HSBC Global Asset Management is comparing this figure against other providers' pricing based on a minimum investment of GBP10,000. (HSBC index trackers minimum investment is GBP1,000 or GBP50 regular savings).
   A table of UK index funds with lowest TERs is below (listing those with retail share classes only). A table of the largest index tracking funds, produced by Lipper, is available from HSBC Global Asset Management upon request.

   Unit trusts/OEICs investing in UK indices with lowest TERs

   
   

   Fund/share class	TER	Source report	FTSE Index
   Fidelity MoneyBuilder UK Index	0.27%	31/08/08	All-Share
   F&C FTSE All-Share Tracker ‘Class 1’	0.36%	31/10/08	All-Share
   Santander Stockmarket 100 Tracker Growth	0.35%	15/04/08	100
   Liontrust Top 100 Fund	0.39%	30/11/08	100
   M&G Inv. Funds 2 - Index Tracker ‘A’	0.46%	31/05/08	All-Share

   
   

   Source: Lipper

3. HSBC index trackers are managed by Sinopia, the specialist in quantitative investment solutions for the HSBC Group, with a network of offices in Europe and Asia: www.sinopia-group.com

   HSBC Global Asset Management

   HSBC Global Asset Management comprises four specialist businesses: Halbis, Sinopia, Multimanager and Liquidity. HSBC Multimanager and HSBC Liquidity are global business units which are part of HSBC Global Asset Management. Halbis Capital Management (‘Halbis’) and Sinopia Asset Management (‘Sinopia’) are legally established as separate companies. HSBC Global Asset Management manages assets of USD375.04 billion (as at end January 2009). Through its network of offices in over 20 countries around the world, HSBC Global Asset Management develops strong relationships with corporates, institutions and financial intermediaries of all sizes and types. HSBC Global Asset Management acts as the global representative of its specialist investment businesses. HSBC Global Asset Management is part of HSBC Global Banking and Markets, a division of HSBC Holdings plc. For more information see www.assetmanagement.hsbc.com

   HSBC Holdings plc

   HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 9,500 offices in 86 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of USD2,527 billion at 31 December 2008, HSBC is one of the world’s largest banking and financial services organisations. HSBC is marketed worldwide as ‘the world’s local bank’.

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