RETAIL FUNDS | Cesar Tordesillas, China

HSBC sees growth in small to mid caps

Mainland China investors can now capture the potential of small to medium cap companies with HSBC's new fund.

The HSBC Jintrust Small-Mid Cap Equity Fund was among the first batch of funds approved since the China Growth Enterprise Market was launched on the Shenzhen Stock Exchange in late October 2009.

“The Fund will invest no less than 85 percent of its assets in small to medium cap stocks, including those listed on the recently launched Growth Enterprise Market, which is aligned with the government’s plan to promote private enterprises in growth sectors," said Leo Cai, fund manager for the HSBC Jintrust Small-Mid Cap Equity Fund.

"As small to medium cap stocks are generally concentrated in high growth areas, given the positive economic outlook, small to medium cap stocks are expected to have strong performance over the next two to three years,” he added.

During 31 December 2008 to 30 September 2009, the CSI 1700 small to medium cap stocks outperformed the CSI 100 large cap stocks, the Shanghai Composite Index, the Shenzhen Composite Index and the CSI 300, and delivered strong performance particularly in 2007 and 2009.

“The successful launch of the Growth Enterprise Market in mainland China provides a good opportunity to invest in small to medium cap companies and attracts more investments into start-ups, many of which are highly competitive and have enormous growth potential. This will also benefit the small to medium cap companies listed on the Main Board,” Mr Cai pointed out.

Steve Lee, Chief Executive Officer of HSBC Jintrust, said, “This Fund further enhances HSBC Jintrust’s product range and serves as a good complement to our equity fund offerings to meet different investment needs. Similar to our large cap equity fund launched in May this year, the HSBC Jintrust Small-Mid Cap Equity Fund will have HSBC Global Asset Management equity holdings between 85 percent and 95 percent − the highest level permitted by The initial public offering period will be from 10 November to 8 December 2009 in mainland China."

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