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Multi-asset

Multi-asset strategies are targeted to meet a range of investment objectives which reflect our diverse client base, including pension plans, insurance companies and sovereign entities.

Our portfolios aim to generate a smoother return streams by diversifying across markets, asset classes, geographies and investment styles and by managing strict risk budgets.

Our multi-asset range of strategies covers: traditional balanced, risk targeted, flexible and income-oriented portfolios, specialised techniques (style factor) and portfolio protection.

Our philosophy 

Our multi-asset investment philosophy is based on the belief that:

  • Markets are inherently inefficient over the short to medium term
  • Asset prices exhibit excess volatility, relative to fundamentals, often leading to market mispricing
  • However, markets can be expected to revert to a measure of 'fundamental value' over the long term
  • We believe active asset allocation based on valuation can exploit this market over-reaction and mean reversion
  • Asset allocation is the key driver of portfolio return and must be dynamic

Our process

Following on from this philosophy, we aim to develop:

  • Robust valuation metrics to review the long term return potential on all available asset classes, on an on-going basis
  • An investment strategy that is adjusted accordingly, shifting portfolio allocations toward asset classes with the best prospective risk-adjusted returns
  • Fulfilment that aims to capture the beta characteristics of the targeted asset classes on a cost efficient basis

To achieve this we:

  • Use asset valuation tools in a systematic way to project future asset class returns
  • Construct a dynamic asset allocation policy to exploit shifts in prospective returns across assets
  • Employ a robust optimisation process, enhanced by considered qualitative judgement, and a disciplined rebalancing of portfolios
  • Carefully manage portfolio risk as well as return potential
  • Choose the most efficient instrument for execution from a risk, return and cost perspective

The investment process for our core multi-asset solutions consists of three key stages:

  1. Strategic Asset Allocation (SAA) – setting the portfolio's reference allocation
  2. Tactical Asset Allocation (TAA) – risk aware active positions against the portfolio's SAA, reviewed frequently to ensure portfolio dynamism
  3. Portfolio Construction – implementation of the portfolio's TAA

HSBC strengths

  • We leverage the insights of a wide range of global teams: macro economists, equity and fixed income investment teams, research specialists that focus on portfolio design and analytics, and product specialists in London, Paris, Toronto and Hong Kong
  • Our strategies benefit from years of experience in advising clients on investment guidelines, benchmarks and risk tolerance criteria, together with an extensive knowledge of local regulation and industry trends

 

Risk Warning
The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Where overseas investments are held the rate of currency exchange may also cause the value of such investments to fluctuate.