MultiAlpha North America Equity (A)
Monthly Report - 29 May 2015
Distribution 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
WestEnd
Advisors
15.80%
Los Angeles
Capital
Management
and Equity
Research,
Inc. 27.97%
Herndon
Capital
Management
16.42%
Artisan
Partners
LP
18.42%
Winslow
Capital
Management,
Inc. 21.39%
Fund Manager
Rayman Bovell
ISIN Code
LU0358929072
Base Currency
USD
Subscription Currency
USD
Fund Size in Millions
(USD) 440.48
Net asset value (subscription currency)
(USD) 15.21
Minimum Investment Horizon
> 5 years
Launch Date
02/09/2008
Benchmark*
100% MSCI USA (USD) NR
*This benchmark is indicative only, is not guaranteed
in any way and may be subject to change. For
illustrative purposes as the fund has no official
benchmark.
About the Managers Selected
Los Angeles Capital Management and Equity Research, Inc. : 27.97%
Herndon Capital Management : 16.42%
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 a large and experienced research team at the firm and the
founders of the research process are active in all aspects of managing the firm
and portfolios. 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.
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 Portfolio Managers each own
15%), with the remainder owned by Atlanta Life. The Large Cap Value strategy
was incepted in 2002 and has been managed by Randell Cain since that time.
The firm has a large investment team and the central research analysts support all
strategies at the firm. We believe Randell Cain is a seasoned and highly capable
portfolio manager, who uses a disciplined and well thought out 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.
Winslow Capital Management, Inc. : 21.39%
WestEnd Advisors : 15.80%
Winslow Capital Management is based in Minneapolis and operates as an
independently run investment boutique of Nuveen Investments. Investment
management is the core competency of Nuveen and Winslow and there is an
equity program in place that insures high alignment of interest for all members of
the team and incentivizes the team until 2018. Winslow implements a
differentiated research process driven off a unique portfolio construction
framework and rigorous sell discipline and risk controls. The strategy does not
have a preferred habitat and focuses on individual companies with above average,
sustainable earnings growth.
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,
importantly, avoiding 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 should
strengthen the structure at the overall fund level, as the existing managers
primarily focus on a bottom-up approach to managing equities.
Artisan Partners LP : 18.42%
Artisan Partners was formed in 1994 and became a public company in 2013. The
firm 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 in Atlanta and is one of the six
investment boutiques comprising the overall firm. The Value team has four
portfolio managers and is , supported by two analysts. The 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 concentrated and high conviction strategy, and is built
in a benchmark agnostic manner, with a focus on identifying stocks 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.
3
MultiAlpha North America Equity (A)
Monthly Report - 29 May 2015
Distribution Shares
Net Cumulated performance (USD) & Risk Ratio
About MultiAlpha
1 month
3 months
2 015
1 year
3 years
5 years
Inception
30/04/2015 27/02/2015 31/12/2014 30/05/2014 31/05/2012 28/05/2010 02/09/2008
29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015
0.54%
-0.88%
3.06%
7.33%
52.73%
81.77%
53.49%
Portfolio
1.27%
0.64%
3.41%
11.37%
68.74%
109.75%
84.24%
Benchmark
-0.73%
-1.52%
-0.35%
-4.04%
-16.01%
-27.98%
-30.75%
Excess Return
Fund's volatility
11.75%
10.96%
14.54%
20.52%
Benchmark's volatility
11.77%
10.89%
14.39%
20.49%
Tracking error
1.84%
1.68%
1.72%
2.28%
Information ratio
-2.01
-2.01
-1.66
-1.18
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
4.30%
2
EXPRESS SCRIPTS INC
USD
Health Care
1.94%
3
GILEAD SCIENCES INC
USD
Health Care
1.74%
4
CVS HEALTH CORP
USD
Consumer Discretionary
1.57%
5
ORACLE CORP / USD
USD
Information Technology
1.45%
6
CELGENE CORP
USD
Health Care
1.44%
7
WALT DISNEY CO ( THE )
USD
Consumer Discretionary
1.43%
8
TJX COMPANIES INC
USD
Consumer Staples
1.33%
9
NIKE INC CLASS B
USD
Consumer Staples
1.30%
USD
Information Technology
10 EMC CORP
Currency
Total Top 10 Holdings
Source : MSCI & HSBC Global Asset Management (France) as at end of May 2015
The MultiAlpha Fund range is the global flagship
product range offered by our specialist 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 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.
1.28%
17.77%
Industry Sector Allocation
Industry Sector
Portfolio
Benchmark*
Spread
Information Technology
23.35%
20.10%
3.25%
Health Care
15.57%
14.97%
0.60%
Consumer Staples
12.85%
13.15%
-0.30%
Financials
11.83%
15.48%
-3.65%
Consumer Discretionary
11.20%
9.36%
1.84%
Industrials
8.93%
10.14%
-1.21%
Energy
7.82%
7.96%
-0.14%
Materials
6.15%
3.27%
2.89%
Telecommunication Services
1.85%
2.63%
-0.78%
Utilities
0.46%
2.96%
Source : MSCI & HSBC Global Asset Management (France) as at end of May 2015
-2.50%
Country Allocation
Portfolio
Benchmark*
Spread
United-States
95.24%
98.04%
-2.80%
South Korea
1.18%
0.00%
1.18%
Cayman Islands
0.79%
0.08%
0.70%
Canada
0.67%
0.05%
0.62%
Hong-Kong
0.64%
0.05%
0.59%
France
0.61%
0.00%
0.61%
Ireland
0.31%
0.81%
-0.50%
United Kingdom
0.29%
0.14%
0.15%
Netherlands
0.26%
0.10%
0.16%
Switzerland
0.03%
0.26%
-0.23%
Other
0.00%
0.48%
-0.48%
Country
* 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 as a basis for or a component
of any financial instruments or products or
indices. None of the MSCI information is
intended to constitute investment advice or a
recommendation to make (or refrain from
making) any kind of investment decision and may
not be relied on as such. Historical data and
analysis should not be taken as an indication or
guarantee of any future performance analysis,
forecast or prediction. The MSCI information is
provided on an “as is” basis and the user of this
information assumes the entire risk of any use
made of this information. MSCI, each of its
affiliates and each other person involved in or
related to compiling, computing or creating any
MSCI information (collectively, the “MSCI
Parties”) expressly disclaims all warranties
(including, without limitation, any 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 (including, without
limitation, lost profits) or any other damages.
(www.msci.com)
Source : MSCI & HSBC Global Asset Management (France) as at end of May 2015
* 100% MSCI USA (USD) NR
3
MultiAlpha North America Equity (A)
Monthly Report - 29 May 2015
Distribution Shares
Important Information
Fund Manager Biography
The HSBC MultiAlpha funds are sub-funds of the HSBC International Select Fund, a Luxembourg domiciled SICAV.
The Investment Adviser to the funds is HSBC Asset Management (France), who in turn appoints sub-advisers to
manager portion of the fund's portfolio. As with any investment where the underlying investments are stocks and
shares, the price of shares in HSBC International Select Fund and any income from it can go down as well as up, is not
guaranteed, and you may not get back the amount of your original investment. Where overseas investments are held,
the rate of exchange may cause the value of such investments to go down as well as up. You should view this
investment as medium to long term, and should plan to keep it for at least five years. Any decision to invest in the
HSBC International Select Fund should be based on the content of the Prospectus, simplified prospectus and most
recent annual and semi-annual reports, which can be obtained upon request free of charge from HSBC Fund
Administration (Jersey) Limited, HSBC House, Esplanade, St Helier, Jersey JE1 1HS, Channel Islands. Investors and
potential investors should refer to the Prospectus for general risk factors and the Simplified Prospectus for specific risk
factors. If you undertake Investment Business with any non-UK members of the HSBC Group you will be excluded from
the benefit of the rules and regulations made under the UK's Financial Services and Markets Act 2000, including the
UK Financial Services Compensation Scheme.
Rayman Bovell
Issued by HSBC Global Asset Management (International) Limited. HSBC Global Asset Management (International)
Limited is registered in Jersey under registration number 29656 registered office HSBC House, Esplanade, St Helier,
Jersey JE4 8WP. HSBC Global Asset Management (International) Limited is regulated by the Jersey Financial
Services Commission for Investment Business and is licensed by the Guernsey Financial Services Commission for
Collective Investments and Investment Business. HSBC Bank plc acts as settlement agent to HSBC Global Asset
Management (International) Limited. Approved for issue in the UK by HSBC Global Asset Management (UK) Limited
authorised and regulated by the Financial Conduct Authority. Copyright © HSBC Global Asset Management (UK)
Limited 2015. All rights reserved.
Head of Wealth Portfolio Management
Mr. Bovell manages the Wealth Portfolio
Management Team in New York and Toronto
and joined HSBC Global Asset Management
(USA) Inc. in 2008 after having worked in the
industry since 2001. Mr. Bovell?s current role
includes research, portfolio management and
asset allocation responsibilities across broad
equity and fixed income asset classes covered
by the Wealth Portfolio Management team.
Prior to joining HSBC, Mr. Bovell was an Analyst
at Merrill Lynch and was responsible for
researching US equity managers, where he
worked since 2005. Previous to that he worked at
Lehman Brothers as a Financial Adviser, where
he joined in 2001. Mr. Bovell started his career as
a Technical Specialist at Pfizer and manufactured
oral and intravenous products.
Mr. Bovell holds a Bachelors of Science degree
from Columbia University in Chemical
Engineering and an MBA from the Ross School of
Business at the University of Michigan. He is a
Chartered Financial Analyst and a member of the
New York Society of Security Analysts and the
CFA Institute. Mr. Bovell leads the Investment
Committee for Columbia Engineering Alumni
Association.
3