MultiAlpha North America Equity (A)
Monthly Report - 31 December 2012
Accumulation Shares
Investment Aims
Fund Details
The Sub-Fund seeks long-term capital growth by
investing at least two thirds of its total non-cash
assets in a well-diversified portfolio of investments
in equity and equity equivalent securities of
companies which have their registered office in,
and with an official listing on a major stock
exchange or other Regulated Market in North
America as well as those companies which carry
out a preponderant part of their business activities
in the North America. The Sub-Fund uses a
multi-manager approach, relying upon one or
more sub-advisers to manage portions of the
Sub-Fund's portfolio. The Sub-Fund may invest no
more than 10% in total in UCITS and UCIs.
Financial derivative instruments may be used for
hedging
and
efficient
portfolio
management
purposes.
Selected Managers Allocation
Fund Manager
Los Angeles
Capital
Management
and Equity
Research,
Inc.
WestEnd
Advisors
17,4%
Randeep Brar
ISIN Code
LU0358928850
Subscription Currency
USD
21,8%
Fund Size in Millions
Artisan
Partners
LP
(USD) 1 041.34
19,1%
Net asset value (subscription currency)
21,2%
20,4%
Winslow
Capital
Management,
Inc.
Herndon
Capital
Management
(USD) 10.71
Minimum Investment Horizon
> 5 years
Launch Date
09/06/2009
Benchmark
100% MSCI USA (USD) NR
About the Managers Selected by Multimanager
Los Angeles Capital Management and Equity Research, Inc. : 21.8%
Artisan Partners LP : 19.1%
LA Capital is an independent investment advisory firm, which was founded
in 2002. LA Capital focuses on mathematically driven risk aware
investment strategies. There is an experienced and stable research team
at the firm, with founders of the research process and excess return
models remaining active in all aspects of the management. LA Capital's
dynamic stock selection model is based on historical analysis and
identification of risk factors/exposures that they expect to drive equity
returns whilst excluding elements that typically are not rewarded. The firm
conducts ongoing research to continuously enhance the original approach,
revalidating the signals employed to and assessing ‘new factors' for
inclusion as drivers behind the selection of companies for the portfolio.
Artisan Partners LP is an SEC registered investment advisor, which was
formed in 1994 and focuses exclusively on managing high value added
equity investment strategies for institutional as well as retail clients. The
firm is majority owned by employees and the large cap value team is based
out of Atlanta and is one of the five investment boutiques comprising the
overall firm. The Value team has a 3 PM structure, with support from a
senior analyst, a research associate, and a trader. The PM team is
seasoned, with a long history of working together and is strongly
incentivized via personal stakes in the portfolios, to generate meaningful
outperformance in the strategies they manage. The portfolio is a high
conviction strategy (30-40 holdings), and is built in a benchmark agnostic
manner, with a focus on identifying names with low valuation, sound
financial condition, and attractive business economics. Turnover tends to
be in the 40%-60% range, and the time horizon for investment is typically
long in duration. The competitive advantage of the strategy is driven by the
team's more flexible and focused approach to value investing, utilizing a
broad opportunity set for idea generation. Thus, there are less scenario
dependencies, leading to participation in different types of market
environments.
Winslow Capital Management, Inc. : 21.2%
Winslow is a 100% employee-owned investment management firm based
in Minneapolis. The investment business is the core competency of the
firm. There is high alignment of interest for key personnel, as the three
managers and the Chief Financial Officer own the firm. Winslow seeks to
build a portfolio of stocks with an average earnings growth rate of 15-20%,
based on internal forward earnings estimates, and that are trading at what
they consider to be a reasonable market valuation. The way the team
construct the portfolio is a key differentiator for this strategy.
Herndon Capital Management : 20.4%
Herndon Capital Management, based in Atlanta, was founded in
September 2001, and is an affiliate of Atlanta Life Financial Group, a 105
year old financial firm. Herndon employees own 45% of the firm’s equity (3
PMs each own 15%), with the remainder owned by Atlanta Life. The LCV
strategy was incepted in 2002. The investment team for this strategy
consists of 6 individuals - PM Randell Cain, a Director of Research, and 4
central research analysts that support all Herndon strategies. We believe
Cain is a seasoned and highly capable PM, who uses a disciplined and
well thought out Large Cap Value investment process. An open minded
approach to idea generation, along with a unique blend of screens and
qualitative inputs, differentiates the strategy versus peers.
WestEnd Advisors : 17.4%
WestEnd Advisors is a private, independently-owned investment advisory
firm based in Charlotte, North Carolina. The cornerstone of WestEnd's
investment philosophy is their conviction that sector and industry
performance is highly correlated with stages of the economic cycle.
Therefore, WestEnd focuses on the sectors which they believe will benefit
most from current economic tailwinds, and avoids sectors it views as
untimely at a particular stage of the cycle. Within the MultiAlpha fund, West
End's concentrated portfolio, their low benchmark adherence and in
particular their sector rotation strategy will strengthen the structure at the
overall fund level, as the existing managers primarily focus on a bottom-up
approach to managing equities. WestEnd replaces Rainier.
3
MultiAlpha North America Equity (A)
Monthly Report - 31 December 2012
Accumulation Shares
Net Cumulated performance (USD) & Risk Ratio
About the Multimanager team
The Multimanager team within HSBC is a
specialist multimanager function, providing
multimanager solutions to clients globally.
HSBC has one of the largest multimanager
teams in the world, comprising more than
45 investment
professionals
(including
a
dedicated
property
multi-manager
team)
based in 11 locations around the world. The
global reach of the team locations adds
value through highly localised and expert
manager
insight
and
allows
the
Multimanager team to leverage their local
market
knowledge
when
building
truly
global solutions for clients.
1 month
3 months
2 012
1 year
3 years
Inception
30/11/2012 28/09/2012 30/12/2011 30/12/2011 31/12/2009 09/06/2009
31/12/2012 31/12/2012 31/12/2012 31/12/2012 31/12/2012 31/12/2012
0.64%
-0.68%
12.10%
12.10%
23.66%
44.93%
Portfolio
0.87%
-0.44%
15.33%
15.33%
34.17%
60.09%
Benchmark
-0.23%
-0.24%
-3.23%
-3.23%
-10.51%
-15.16%
Excess Return
Fund's volatility
11.44%
17.53%
17.77%
Benchmark's volatility
11.52%
17.25%
17.24%
Tracking error
1.67%
1.73%
1.90%
Information ratio
-1.67
-1.56
-1.46
The above performance figures refers to the past and are not a reliable indicator of future returns.
Top 10 holdings
Industry Sectors
Weight
1
Holdings
APPLE INC
USD
Information Technology
3.14%
2
IBM CORP
USD
Information Technology
2.18%
3
ORACLE CORP / USD
USD
Information Technology
1.68%
4
QUALCOMM INC
USD
Information Technology
1.58%
5
COACH INC
USD
Consumer Staples
1.47%
6
GOOGLE INC
USD
Information Technology
1.35%
7
CELGENE CORP
USD
Health Care
1.33%
8
MICROSOFT CORP
USD
Information Technology
1.30%
9
EXXON MOBIL CORP
USD
Energy
1.19%
USD
Energy
10 APACHE CORP
Currency
1.18%
Total Top 10 Holdings
Source : MSCI & HSBC Global Asset Management (France) as at end of December 2012
16.41%
Industry Sector Allocation
Industry Sector
Portfolio
Benchmark*
Spread
Information Technology
23.25%
18.97%
4.28%
Consumer Staples
15.05%
13.56%
1.49%
Financials
13.53%
15.15%
-1.62%
Health Care
11.57%
11.88%
-0.31%
Energy
10.56%
10.91%
-0.35%
Consumer Discretionary
10.14%
9.10%
1.04%
Industrials
7.98%
10.22%
-2.24%
Materials
4.62%
3.60%
1.02%
Telecommunication Services
2.94%
3.24%
-0.30%
Utilities
0.36%
3.37%
Source : MSCI & HSBC Global Asset Management (France) as at end of December 2012
-3.00%
Country Allocation
Portfolio
Benchmark*
Spread
96.14%
98.11%
-1.97%
United Kingdom
1.15%
0.13%
1.02%
South Korea
0.96%
0.00%
0.96%
Switzerland
0.55%
0.43%
0.12%
Ireland
0.46%
0.75%
-0.29%
Cayman Islands
0.38%
0.12%
0.26%
Hong-Kong
0.18%
0.00%
0.18%
Canada
0.17%
0.08%
0.09%
The Bermuda Islands
0.00%
0.18%
-0.18%
Sweden
0.00%
0.05%
-0.05%
Other
0.00%
0.15%
-0.15%
Country
United-States
About MultiAlpha
The MultiAlpha Fund range is the global
flagship product range offered by the
specialist multimanager team within HSBC.
Our global teams seek to identify and
combine specialist managers within each
asset class. We search for managers who
can demonstrate an edge in either the
information they possess about the asset
class and/or the
more
powerful
and
insightful analytical process they utilise in
the management of their strategies. This is
done using a global process which relies on
well
organised
research
and
decision
making,
informed
by
the
sensible
application of a range of mathematical
tools. The managers selected will be those
who are considered to have a clearly
identifiable skill or skills which gives them
an advantage over other managers in their
chosen specialist field of expertise. Those
chosen and their weights in a MultiAlpha
portfolio will be a reflection of our teams
assessment of the performance attributable
to their skill and how the portfolio they
manage is best combined with the other
managers who we have selected in an
effort to smooth out 'peaks and troughs' in
performance
that
typically
occur
in
individual approaches.
Source : MSCI & HSBC Global Asset Management (France) as at end of December 2012
* 100% MSCI USA (USD) NR
3
MultiAlpha North America Equity (A)
Monthly Report - 31 December 2012
Accumulation Shares
Contact Us
Fund Manager Biography
For further information on HSBC Global Asset Management, HSBC Multimanager or any of our funds
performance and prices, please visit
www.assetmanagement.hsbc.com
Randeep Brar
HISF helpdesk + 971 566 032 085 or email us at adviser.services@hsbc.com
Randeep Brar (New York) is responsible for
managing the Multimanager team in New
York and joined HSBC Global Asset
Management in 2007, and has been in the
industry since 1994. Randeep's current role
includes
both
research
and
portfolio
management responsibilities, across broad
US equity and fixed income asset classes
covered by the Multimanager team.
Please note: To help improve our service and in the interest of security we may monitor on a random
basis and/or record your telephone calls with us. Alternatively, contact your local sales and client services
representatives.
To place a deal, please contact:
Luxembourg
RBC Dexia Investors Services Bank S.A.
Fax: +352 2460 9500
Tel: +352 2605 9553
Initial orders can only be processed once the transfer agency have received and authorised the original
completed application form, together with a certified copy of identification, and only after cleared funds
have been received. (Details of suitable identification documents are given within the application form).
Please note that should there be any documents or signatures missing, this will cause a delay in an
investment being made. All subsequent subscriptions will also be made upon receipt of cleared funds.
Head of Multimanager team, HSBC US
Prior
to
joining
HSBC
Global
Asset
management, Randeep led small cap and
mid cap portfolio management and research
with-in the SEI Investments, manager of
manager program, where he worked since
2001 in
a
variety
of
senior
research
positions. Previous to that, Randeep was
Associate
Director
Research
at
Barra
Rogers Casey, which he joined in 1994 and
held roles with-in investment consulting and
equity manager research.
Randeep holds a BE in engineering from
Punjab University, India and is a CFA
charterholder and also holds the CAIA
designation.
HSBC International Select Funds (HISF) are sub-funds of HSBC International Select Funds, a
Luxembourg based SICAV (Société d’Investissement á Capital Variable) regulated by the CSSF. The
funds mentioned in this document may not be registered for sale or available in all jurisdictions. For
available funds please contact your local HSBC office.
HSBC International Select Funds cannot be sold by anyone in any jurisdiction in which such offer or
solicitation is not lawful or in which the person making such an offer or solicitation is not qualified to do so
or to anyone to whom it is unlawful to make such offer or solicitation. All applications are made on the
basis of the current HSBC International Select Funds Prospectus, simplified prospectus and most recent
annual and semi-annual reports. These can be obtained on request and free of charge from HSBC Global
Asset Management (UK) Limited or the local distributors. The value of investments may go down as well
as up and you may not get back the full amount you invested. Where overseas investments are held the
rate of exchange may cause the value of investments to go down as well as up. Markets in some countries
can be described as ‘emerging markets’. Some of these may involve a higher risk than where an
investment is within a more established market. Where a sub-fund invests predominately in one
geographical area, any decline in economic conditions may affect prices and the value of underlying
investments.
The securities representing interests in the HSBC International Select Funds have not been and will not be
registered under the US Securities Act of 1933 and will not be offered for sale or sold in the United States
of America, its territories or possessions and all areas subject to its jurisdiction, or United States person,
except in a transaction which does not violate the Securities Law of the United States of America.
This document was produced by HSBC Global Asset Management (UK) Limited for distribution in the
Middle East and North Africa region by HSBC Global Asset Management MENA, who are marketing the
product in a sub-distributing capacity on a principal - to - principal basis. HSBC Global Asset Management
MENA, is a unit that is part of HSBC Bank Middle East Limited, PO Box 66, Dubai, UAE, which is
incorporated and regulated by the Jersey Financial Services Commission. Services are subject to the
Bank’s terms and conditions. HSBC Bank Middle East Limited is a member of the HSBC Group. HSBC
Global Asset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ, UK, is
authorised and regulated in the United Kingdom by the Financial Services Authority and registered as
number 122335.
The information provided has not been prepared taking into account the particular investment objectives,
financial situation and needs of any particular investor. As a result, investors using this information should
assess whether it is appropriate in the light of their own individual circumstances before acting on it. The
information in this document is derived from sources believed to be reliable, but which have not been
independently verified. However, HSBC Bank Middle East Limited makes no guarantee of its accuracy and
completeness and is not responsible for errors of transmission of factual or analytical data, nor shall HSBC
Bank Middle East Limited be liable for damages arising out of any person ’s reliance upon this information.
All charts and graphs are from publicly available sources or proprietary data. The opinions in this
document constitute the present judgment of the issuer, which is subject to change without notice.
This document is neither an offer to sell, purchase or subscribe for any investment nor a solicitation of
such an offer. This document is intended for the use of institutional and professional customers and is not
intended for the use of private customers. This document is intended to be distributed in its entirety. No
consideration has been given to the particular investment objectives, financial situation or particular needs
of any recipient. Any transaction will be subject to HSBC Bank’s Terms of Business.Copyright © HSBC
Global Asset Management (UK) Limited 2012. All rights reserved.
* Source: MSCI. The MSCI information may
only be used for your internal use, may not
be reproduced or redisseminated in any
form and may not be used to create any
financial instruments or products or any
indices. The MSCI information is provided
on an 'as is' basis and the user of this
information assumes the entire risk of any
use it may make or permit to be made of
this information. Neither MSCI, any of its
affiliates or any other person involved in or
related to compiling, computing or creating
the
MSCI
information
(collectively,
the
'MSCI Parties') makes any express or
implied warranties or representations with
respect to such information or the results to
be obtained by the use thereof, and the
MSCI Parties hereby expressly disclaim all
warranties (including, without limitation, all
warranties
of
originality,
accuracy,
completeness,
timeliness,
non-infringement,
merchantability
and
fitness for a particular purpose) with respect
to this information. Without limiting any of
the foregoing, in no event shall any MSCI
Party have any liability for any direct,
indirect,
special,
incidental,
punitive,
consequential
or
any
other
damages
(including, without limitation, lost profits)
even if notified of, or if it might otherwise
have anticipated, the possibility of such
damages.
3