HSBC Launches UCITS III Compliant Funds

by Carla Johnson, Investors Offshore.com

19 August 2005

HSBC Bank International Limited has announced a relaunch of its HSBC International Capital Secured Growth Funds (CSGF) on 15 August 2005 with five new funds following the adoption of UCITS III legislation.

HSBC says that key changes to its capital secured growth funds include:

• greater security - an increase in the underlying capital security of CSGF launches;
• more investment choice - for the first time in this fund series, investors can choose between an equity index linked fund and a fund linked to commodity related stocks;
• more flexibility - for the first time investors in this fund series can choose between a three- and five-year investment term; and between growth only or income and growth funds;
• more funds to choose from - there are five funds on offer in this launch whereas in previous launches of CSGF there have typically been only two or three funds on offer.

Dan Massey, head of global funds and investments, said “Although capital protection remains uppermost in our customers minds they are also demanding more choice, flexibility and investment opportunities in new markets.

“Applying HSBC's global investment expertise to the UCITS III legislation gives us more flexibility to offer a wider range of fund options. The increased choice means customers can select the fund which best suits their existing portfolios to bring greater diversification and balance to their portfolios”.

The five funds on offer are the UK Growth Fund, the UK Bonus Income Fund, the Japan Bonus Fund, the Asia Opportunity Fund and the Global Commodity Income Fund. All five funds are available from 15 August until 4 October, but may close earlier if oversubscribed.

UCITS III is an EU directive allowing greater use of financial instruments and more varied investment
strategies than previous UCITS (Undertaking for Collective Investment in Transferable Securities) legislation. It
provides for strict limits and enhanced disclosure requirements to EU financial services regulators on the use of
such financial instruments. HSBC International Capital Secured Growth Funds plc implemented the relevant
provisions of the UCITS III directive on 4 May 2005.

The new asset structure for CSGF funds has allowed HSBC Bank International Limited to increase the
underlying capital security of CSGF launches. All assets of this latest CSGF launch are backed by HSBC Bank
plc, which has a credit rating of AA- from Standard & Poor’s and Aa2 from Moody’s Investor Services, Inc. For
even greater security, in line with the provisions of UCITS III, at least 90% of assets are collateralised by
government bonds from the "Group of Seven" nations. Enhanced collateralisation and disclosure requirements
required by UCITS III further improve security to investors, says HSBC.

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