HSBC fund arm picks Pimco, Franklin for new launch

LONDON, July 7 (Reuters) - HSBC Global Asset Management (HSBA.L) has selected Pimco, Franklin Templeton and Loomis Sayles as underlying managers for its new manager-of-managers fund, the company said on Tuesday.

Franklin and Allianz-owned Pimco (ALVG.DE) will each receive 40 percent of the assets in the new HSBC MultiAlpha Global Aggregate Bond Fund and Loomis Sayles will get 20 percent, a spokeswoman said.

The fund will invest across fixed income, with a neutral position of 65 percent in sovereign and supranational debt, 20 percent in mortgage and securitised bonds, and 15 percent in corporate bonds.

The fund may also invest a small portion in high yield and emerging market debt, HSBC GAM said. The lead manager will be Rodney Gaskell at specialist unit HSBC Multimanager.

HSBC said that the three underlying managers selected at the outset were chosen based on their ability to perform and for the different styles they implement.

Pimco was described as a core benchmark-focused manager with a strong emphasis on duration and yield curve strategies and active sector rotation.

Franklin is seen more as a top down fundamental manager with a focus on country, currency and sector allocation, whilst Loomis Sayles was described as taking a bottom up value approach with an emphasis on credit security selection as the primary source of returns above the market.

The styles are blended together in a bid to produce an "optimal risk reward profile", the company said. (Reporting by Claire Milhench; editing by Simon Jessop)