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HSBC Global Asset Mgt launches quantitative forex fund
* Currency "untainted" by credit crisis
* Target return of Libor plus 5 percent
* Plans multi-strategy fund launch
By Laurence Fletcher
LONDON, April 6 (Reuters) - HSBC (HSBA.L) Global Asset Management has launched a global currency fund that uses a computer model to seek out opportunities in an asset class it thinks are "untainted" by the credit crisis.
The HSBC GIF Global Currency fund will target a return of Libor plus 5 percent by investing in a basket of currencies and allocating between 10 different sub-strategies in areas such as volatility, momentum and carry trades.
"Currency is a very interesting asset class at the moment and is sort of untainted by events of the last 12-24 months," Bill Maldonado, head of alternative investments at the firm's active investment arm Halbis, told Reuters on Monday.
"It's something that maybe hasn't been in the mainstream but has generated a lot more interest," he said on Monday. The computer-driven model allocates between the 10 different sub-strategies according to their recent success.
If there is an event affecting market behaviour, the fund managers are able to turn down risk in these sub-strategies. This has happened three times in the past 18 months.
The fund had little exposure to the carry trade -- a bet where investors borrow in low yielding currencies to fund purchases of higher yielding assets in other currencies, Maldonado said.
A strategy similar to the computer-driven model has been running since 2006 and produced annual returns of 7.9 percent, the company said.
Maldonado said he would like the fund to raise about 500 million pounds ($746 million) in the coming months.
The fund management team also runs sub-strategies based on fixed income and equities and may launch a multi-strategy fund in future.
"This is the first fund we're rolling out for the team and there's an intention to roll out some other funds further down the road. Our objective ultimately would be to have a full multi-strategy fund launch," Maldonado said. (To read the Reuters Hedge Fund Blog click on blogs.reuters.com/hedgehub; for the Global Investing Blog click here) (Editing by Andrew Macdonald) ($1=.6702 Pound)
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