HSBC Global Asset Management is to launch the HSBC GIF Middle East and North Africa (MENA) fund by the end of October, subject to regulatory approval. The fund will form part of HSBC's flagship Global Investment Funds SICAV, domiciled in Luxembourg and available for sale in more than 35 countries. It will be managed by Andrea Nannini and his team at Halbis, the active management specialist within HSBC Global Asset Management. Countries within this sphere include United Arab Emirates, Oman, Kuwait, Bahrain, Egypt, Jordan, Qatar, Lebanon, Morocco, and Tunisia. The fund can hold up 10 percent of its portfolio in Saudi Arabia. HSBC Global Asset Management already has an established asset management business in Saudi Arabia, managing almost $6 billion (£3billion) in Saudi equities. This business is the largest in the country for domestic investments and offers the largest mutual fund range. Nannini said: “The MENA region offers stock market exposure to the next generation of emerging markets. These markets are expected to benefit from continued rapid economic growth and increasing liberalization of the financial markets. “Many of these countries are positioned to benefit from high and sustained commodity prices, in particular those within the Gulf region. Additionally, ambitious infrastructure development programs are underway within the region, which provides an exciting investment theme.” He added that within many of these markets, the companies were still undiscovered and under researched, thereby offering the potential to find good valuation anomalies amid individual stocks. Nannini's team also manages HSBC's New Frontiers fund, a specialist fund aimed at institutional investors, which currently has around 45 percent exposure to the MENA region. The New Frontiers fund was launched on Feb. 4 this year. Benchmarked against the MSCI Arabian ex-Saudi Arabia Total Return Index, the HSBC Gif MENA fund will invest in companies from this region with a market capitalization of greater than $100 million (£50 million). Nannini and his team will take a bottom up, valuation driven approach, choosing stocks that display strong and sustainable business models, good corporate governance and attractive valuations. The fund will typically hold 50 to 60 stocks. He said: “The MENA region offers stock market exposure to the next generation of emerging markets. These markets are expected to benefit from continued rapid economic growth and increasing liberalisation of the financial markets. Many of these countries are positioned to benefit from high and sustained commodity prices, in particular those within the Gulf region. Additionally, ambitious infrastructure development programmes are underway within the region, which provides an exciting investment theme.” The minimum retail investment is $5,000 and there is a 1.5 percent annual management fee.
