HSBC China JV fund plans small-cap equity fund

SHANGHAI Wed Sep 2, 2009 11:33am EDT

HSBC Jintrust Fund Management Co. Ltd. Chief Executive Officer Steve Lee speaks during the Reuters China Summit in Shanghai September 2, 2009. REUTERS/Aly Song

HSBC Jintrust Fund Management Co. Ltd. Chief Executive Officer Steve Lee speaks during the Reuters China Summit in Shanghai September 2, 2009.

Credit: Reuters/Aly Song

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SHANGHAI (Reuters) - HSBC Holdings Plc's (HSBA.L) (0005.HK) China fund venture plans to launch a small-cap equity fund later this year, as it aims to at least double its assets under management in five years, a senior executive said on Wednesday.

The fund, which is awaiting regulatory approval, will invest mainly in small- and medium-sized firms in China, including those to be listed on the country's planned second board, said Steve Lee, chief executive officer of Shanghai-based HSBC Jintrust Fund Management Co.

The company also plans to launch more life-cycle funds, which steadily shift to less risky investments such as bonds as a client moves closer to retirement, and will consider new products including index-tracking funds as China further deregulates its capital markets.

"For us, the opportunity lies where these markets open up," Lee said at the Reuters China Investment Summit, held at the Reuters office in Shanghai.

He said China's fund sector would at least double in size over the next five years. Shanghai-based fund consultancy Z-Ben Advisors has estimated the sector would triple, to top $1 trillion in five years, driven by product innovation and financial deregulation.

HSBC Jintrust, founded in 2005 by HSBC and Shanxi Trust, managed 9.7 billion yuan ($1.42 billion) of assets in six mutual funds as of June 30, according Z-Ben Advisors.

In June of this year, the company launched the HSBC Jintrust Large Cap Equity Fund, which invests mainly in blue-chip stocks, and raised 2.9 billion yuan in the initial offering.

($1=6.830 Yuan)

(Reporting by Samuel Shen and Edmund Klamann; Editing by Hans Peters)

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