HSBC launches Amanah Dynamic Allocation Shield Fund

The fund, which has been approved by the HSBC Shariah Supervisory Committee, allow investors to invest in equity markets whilst limiting their exposure to losses.

Investors in the HSBC Amanah Dynamic Allocation Shield Fund will have the opportunity to liquidate their investments at current prices each year without any exit charge, and at the same time benefit from a high degree of capital protection at the end of the recommended investment horizon (approximately 5 years). The Fund is designed to cap losses at a maximum of 10% of the initial capital invested in case of equity market falls, so that investors can rest assured that at least 90% of their investments are safe. This initial capital protection is further enhanced through an annual profit lock-in mechanism which captures a portion of the eventual gains accrued to the fund.

The fund will invest in a diversified portfolio comprising up to 60 international companies selected from the Dow Jones Islamic Market Index and low risk Commodity Murabaha transactions. The balance between equity and non-equity investments will be constantly adjusted through a market sensitive Dynamic Allocation Policy designed to increase the exposure to equities when they are gaining in value, and to decrease equity investments when their value is falling.

Richard Rogers, Regional Manager Financial Planning Services, HSBC said: "This fund is really designed for those investors that have seen recent equity market gains and want to participate in them while limiting their capital exposure. The fact that it is a Shariah compliant investment also widens the spectrum of clients that can benefit from it. Unlike many other capital protected funds, the HSBC Amanah Dynamic Allocation Shield Fund will actually make direct investments in shares, benefiting from the dividend distributed by these companies as well as any rise in their share price. This product is like a global equity mutual fund, and can be used to complement other capital protected products designed to beat fixed income investments.

At the end of the day, although we continue to see volatility in equity markets, over the long term we know that clients will need to take an exposure to equities if they want to benefit from the possibility of superior returns in the long run. At the very minimum, this product with its capital protection features, gives them control of expectation on the risk they are taking in their portfolio which is always something good to have".

The Fund, which has a total life of 5 years, will be available from 1 November 2003 till 31 May 2004.

In addition to the HSBC Amanah Dynamic Allocation Shield Fund, HSBC is currently offering the latest issue of its Capital Secured Growth Funds. The new issue, which is available for a limited period, includes two funds designed to give customers 100% capital security and capture potential growth. Furthermore, one of these funds offers a minimum return of at least 9.5% at the end of the investment term.

For more information please contact HSBC's Financial Planning Advisers at your nearest branch of HSBC.