HSBC Global Asset Management’s Emerging Market assets pass USD100bn milestone

Written by Ray Clancy

HSBC Global Asset Management has announced a major milestone as assets under management in Emerging Markets passed USD100bn. (As at end September 2010, HSBC Global Asset Management had USD103bn in Emerging Markets assets under management).

HSBC Global Asset Management classifies Emerging Markets assets as those investments in countries within the MSCI Global Emerging Markets Index.
If considering an alternative industry classification, which also includes funds invested in the fast growing markets, such as Hong Kong and Singapore, HSBC Global Asset Management would have approximately USD135bn in Emerging Markets assets (as at end September 2010). This ranks HSBC Global Asset Management's Emerging Markets business as one of the largest globally.

John Flint, Chief Executive, HSBC Global Asset Management, attributed this success to proven investment capabilities, along with the strength of the HSBC brand and its extensive footprint in Emerging Markets.
"The world's centre of gravity is moving toward the Emerging Markets and HSBC has for many years been at the forefront of providing quality investment solutions (2).

We now have two distinct opportunities for growth within our Emerging Markets businesses. The first is to develop investment product for domestic clients in the high growth emerging economies. The second is to develop product to facilitate portfolio flows from the developed world to the emerging markets. During 2011 we plan to launch a range of innovative capabilities and products that will capitalise on both of these opportunities."
HSBC Global Asset Management has one of the world's largest investment management teams, with more than 200 dedicated Emerging Market investment professionals located across 18 key locations.

Flint added: "An additional strength is that through the HSBC Group, the asset management business has access to one of the largest global financial services networks with offices in 54 Emerging Market countries. This provides unique local market knowledge and direct access to local companies and investment opportunities, thereby enhancing the portfolio management process and facilitating first class corporate governance and engagement."

In terms of Emerging Market capabilities, HSBC caters for a broad client base of institutional, wholesale and retail clients by offering both segregated accounts and pooled funds. The fund ranges include an extensive cross-border offering in addition to domestic funds tailored to suit individual market requirements. In total, there are more than 750 equity, fixed income and alternative products across HSBC's domestic, single country, regional and global ranges.

Flagship funds include; USD7.42bn HSBC GIF India Equity, USD2.84bn HSBC GIF Brazil Equity, USD1.96bn HSBC GIF BRIC Equity and USD1.26bn Global Emerging Markets Bond. An additional flagship capability is Brazilian bonds, where HSBC Global Asset Management has more than USD3bn invested. (3) The split of assets is approximately 50% equities and 50% fixed income.

Although Emerging Markets can be volatile and there may be bumps along the way, HSBC, as a long term investor, maintains its optimism over this asset class.
Flint said: "Much of the emerging world benefits from low levels of government and household debt and favourable demographics. This will help to fuel domestic consumption as the world rebalances. Ultra loose monetary policy in developed markets creates the risk of asset bubbles building in the emerging economies but we are not there yet. On a price-to-book basis, valuations still look attractive for many emerging equity markets."

As at end September, HSBC Global Asset Management had a total assets under management (AUM) of USD444.6bn, so Emerging Markets represent almost a quarter of its total AUM.