HSBC Global Property Fund
Direct and listed property investments in a single fund
Since 2007, the HSBC Global Property Fund has provided investors with globally-diversified access to direct (unlisted) property and listed property via quoted real estate equities in a single fund.
We actively allocate between direct property funds and listed property equity funds. Our investments are held indirectly, mainly through funds, rather than by owning buildings directly. This approach helps to access local markets quickly and easily, using specialist managers, as well as diversifying property-specific risk efficiently.
HSBC Global Property Fund offers exposure to*
- Two direct property funds with an aggregate value of GBP 1.3 billion and seven indirect property securities funds with an aggregate value of GBP 2.3 billion
- Over 60 directly-held property equities
- 22 countries, investing in over 70 buildings (direct property funds), and over 100 property equities that collectively own thousands of buildings
*as at 31 October 2021
Exposure to global property in a liquid form
There are three reasons behind our approach to blending listed and unlisted property. Combining funds that invest in direct property with and those that invest in property equities offers potentially lower volatility of returns than would be the case from investing in equity markets alone. It also helps to maintain higher liquidity than is possible when investing only in direct property. Finally, investing in both types of property provides the opportunity to enhance returns as their relative attractiveness varies over time.
Why consider choosing this fund?
- Globally-diversified through a mixture of unlisted and listed property markets
- Our Fund has delivered strong risk-adjusted performance since launch, returning 5.5% annualised1
- A one-stop solution for your clients’ property exposure
- A fund of funds that gives access to some of the world’s best property managers
- The fund is managed by a team headed by Guy Morrell, who retained his FE Alpha Manager rating for eleven consecutive years from 2011 to 2021, and was awarded “FE Alpha Manager of the Year” in 20162
Past performance is not an indication of future returns.
1 Since launch on 26/11/2007, returning 5.5% annualised, net of charges. Source: Morningstar, total returns, net income reinvested, single price in GBP of C Acc share class (Retail Acc share class before Oct 2012). 2 The Alpha Manager Rating is a quantitative rating that distinguishes the top UK fund managers based on alpha generation and outperformance across their career history, allowing investors to instantly identify those managers who have consistently outperformed their peer group over time. Only the top 10% of UK managers receive this accolade, representing those managers who are the very best of the best in the industry.
What are some of the risks when investing?
The value of an investment in the portfolios and any income from them can go down as well as up and as with any investment you may not receive back the amount originally invested.
- Time horizon: this is a medium to long-term investment and your clients should plan to keep it for at least five years
- Risk to capital: the capital value and the income generated by the fund may go down as well as up and is not guaranteed. Investors may not get back the amount originally invested
- Currencies: the currency movements between sterling and other countries could influence the returns of the portfolio. Where overseas investments are held the rate of currency exchange may cause the value of such investments to go down as well as up
- Property: the long term nature of investment in direct property and the income generated tend to make this type of investment less volatile than equities although it can be difficult to buy and/or sell quickly. Where the underlying funds invest directly in property, the property in the fund may not be readily realisable, and the Manager of the fund may apply a deferral on redemption requests. The value of property is generally a matter of the valuer’s opinion rather than fact
- Commercial and residential property have different risk profiles and returns in one market do not necessarily follow the other. The risks involved in property investment are different from other types of investments such as equities and bonds, in that this type of investment tends to lag the economic cycle rather than lead it
- Some of the underlying property funds will not price daily
- Listed property securities are part of the equity market and are more volatile than direct (unlisted) property, which can mean that the price of Shares and the income from them can fluctuate, sometimes dramatically
- There are certain additional costs and risks associated with the direct ownership of real estate. These include: risk of oversupply in local markets, risk of extended vacancies within properties, property taxes and operating expenses, risk of changes in planning laws, risks relating to legal title, costs relating to environmental problems and liability risk to third parties for damages resulting from environmental problems, and uninsured damages from floods, earthquakes and other natural disasters
- Property values are affected by a number of factors, including general and local economic conditions, attractiveness and location of properties, increases in local competition, financial condition of tenants, quality of maintenance, limitations on and variations in rents, level of investor demand and changes in interest rates