HSBC

HSBC WORLD SELECTION PORTFOLIOS

Designed to take the uncertainty out of investment risk.

World Selection is a range of Portfolios each designed with a specific degree of investment risk. They are actively managed to keep them within that level whatever happens in financial markets. So over the time you invest, typically 3 to 5 years, you can be confident your level of risk will always stay the same: there are no surprises.

We manage three World Selection Portfolios that offer a different level of risk and potential reward. All you have to do is choose one to match your preference. Then we aim to maximise your return balanced against the level of risk you are prepared to take.

A broad spread for a stable investment

These portfolios invest in an array of different funds and investments that have each been selected on powerful market intelligence gathered by a worldwide team of experts.

Each investment is very broad and may include UK and overseas equities, bonds and cash. As well as these traditional investments the Portfolios include alternative assets like private equity and commodities. So some of the funds in HSBC World Selection could invest in gold or soya or lead or businesses or office blocks and shopping centres, or all or any of them.

Many of the assets included in the Portfolios are not normally available to the private investor.

By constructing such a diverse portfolio all the risk is not borne by one fund, one type of asset or one geographic region.

The result is that when the market dips for some types of investment they could be offset by others that continue to perform positively and the portfolio should be more stable in differing economic climates. But please be aware that in extreme market conditions all types of investment may produce negative returns. So, like all investments, the value of these can fall as well as rise and you may get back less money than you put in.

Proactively managed for an optimal portfolio

What makes HSBC World Selection so special is our global team working together to monitor the portfolio around the clock. We proactively manage your investment in an attempt to anticipate market events. The result is that you get an optimal portfolio that works hard to stay optimal.

We achieve this goal through HSBC’s scientific approach to asset management.

We begin with strategic asset allocation– picking the right types of investment over the long term.

We combine specialist skills like advanced mathematic modelling with expert knowledge of worldwide markets to create the overall structure of each of HSBC World Selection Portfolios .We then choose which investments to buy, in which geographies and sectors, and in what combination. Our goal is always to select the investments which offer the best return for an accepted level of risk.

Our asset managers also have license to create extra value through tactical asset management. So they try to take advantage of certain situations on the market place like short-term market movements, mispricings or anomalies by altering our weighting within the asset classes we hold.

Finding the right funds and managers

Once we have decided on the appropriate strategic and tactical asset allocation for the portfolios our investment team uses their local knowledge in their mission to find what we believe to be the best fund managers and funds available worldwide to include within HSBC World Selection. They have no allegiance to the bank in their search for excellence and funds and managers will be chosen whether they are from HSBC or not.

For practical reasons we invest in managers who we consider to be exceptional in their class in a number of ways. We will either make an investment directly into a fund managed by a specialist manager or where they do not offer a fund that matches our criteria we may appoint them to manage part of the money in an HSBC fund.

Because we are “on the ground”, close to the markets in which we operate we think there is a greater likelihood of unearthing hidden gems – spotting funds and managers with exciting potential that our rivals may not detect. We search for global leaders, specialist managers and associated funds with differing investment approaches and then try to combine them with the optimal level of attributes.

By blending managers this way we are aiming to ensure that our portfolios are not just widely diversified in terms of investment and geographically but are diversified in terms of the managers’ particular styles and philosophies.

Portfolios where we manage the risk as well as your money

To achieve the same balance World Selection Portfolios offer, you would have to pick funds from a galaxy of different types of investments. Then you would need to maintain the structure in an optimal way to ensure a continuous match to your investment objectives in a constantly changing market.

These investments save you that effort and always keep you within your preferred level of risk.

In other words they offer you stocks and shares with less shocks and scares.

HSBC WORLD SELECTION PORTFOLIOS

World Selection Portfolios aim to give you a healthy return for your money over the long term – say five years or more. But, so too do plenty of other investments. So what makes ours so special?

The difference lies in their approach to risk.

You see when we designed our portfolios we didn’t just look at what investors like. We also looked at what they didn’t like. And that’s uncertainty, market ups and downs, and losing money.

Like you they were aware that every investment can fall as well as rise and that you may get back less than you invested. But they wanted the downs to be less stomach churning without losing all of the ups.

So our World Selection Portfolios were created with the intention of giving you as smooth an investment ride as possible. So they’re like stocks and shares with less shocks and scares.

 How do we achieve that?

Mainly in two ways: through diversification and pro-active monitoring.

SPREAD THE PORTFOLIO FOR A SMOOTHER RIDE

The idea behind diversification is for our Portfolios to spread themselves across lots of sectors and geographical areas and different types of investment.

And that’s because with such a diverse range of different investments they are less likely to all be affected by market events in the same way at the same time. So as and when your portfolio enjoys growth it can be expected to do so with more stability than one containing, for example, just equities and bonds.

Now if the wider the spread the smoother your investment ride you are probably asking yourself why hasn’t anyone created an extraordinarily diverse portfolio already? You know, something that as well as putting your money into stocks and shares goes into a whole host of other areas too?

We couldn’t agree more. So our Portfolios don’t just invest in traditional areas like equities, bonds and cash. They can also put your money into other funds including those that invest in property, private equity and commodities.

In other words some of the funds in HSBC World Selection could invest in things like gold or soya or lead. Or businesses or office blocks and shopping centres. Or all or any of them.

And those unexpected additions to your portfolio don’t just aim to lower risk, they also give you investment opportunities that most other investments don’t offer you.

WE GO FURTHER TO REDUCE RISK

As their name suggests, World Selection Portfolios spread themselves across the world in both established and emerging markets.

That in itself may sound risky. After all Portfolios that include overseas investments can be adversely affected by exchange rate variations. (Although we’d like to point out they can be positively affected too.)

But don’t be misled by thinking that investing at home in the UK is safe. It’s only 9% of the world market. (Source:  MSCI Barra). By investing globally and spreading your exposure our Portfolios aim to make your investment not more, but less risky.

And as well as investing around the globe World Selection Portfolios also invest in funds run by other top providers where we believe they can perform better than our own. What’s more we are also able to recruit or invest with fund managers not normally available to private investors.

A GLOBAL INVESTMENT PRO-ACTIVELY MONITORED BY A GLOBAL TEAM

We don’t stop there either. On the contrary, our people are always on the move, investigating businesses, markets and managers – both of funds and companies – to find the ones that best suit our Portfolios.

We’re able to do that because we have a worldwide team of carefully chosen experts from both inside and outside of HSBC that monitors the markets and investments in World Selection Portfolios across all the time zones in the world.

Because these people actually live in the areas they research and analyse they are more likely to find the potential and avoid the risks that other more remote managers may not detect. After all, searching for investment gems from afar doesn’t come close to on-the-spot investigation.

So if you want to invest with less thrills and spills, you’ll enjoy the ride with our World Selection Portfolios.

• Three World Selection Portfolios that offer different levels of risk and potential rewards so we can match one to your needs
• Portfolios that invest around the globe – the world is your oyster
• Invests wherever we see growth potential, not restricted to HSBC investments
• Continuously monitored around the clock to give you peace of mind
• Different investment styles and geographies so your Portfolio is less likely to be affected by the same market influences and any growth is likely to be steadier
• To best take advantage of our Portfolios treat each of them as a long-term investment of five years or longer
• Even with a widely diversified portfolio the value of investments can fall as well as rise and you may not get back what you can put in
• Minimum investment of a £1,000 lump sum or £50 a month (or £20 for a personal pension)
• Meet the World Selection team and enjoy the latest market commentary on www. Hsbc.co.uk/worldselection