Pointing to the growth potential of the Hong Kong stock market and the long term prospects of its economy, Allianz Dresdner Asset Management (adam) has announced the launch of its Dresdner RCM Hong Kong Select Capital Guaranteed Fund. The new fund provides a yield enhancement and capital guaranteed feature and will be sold exclusively through HSBC branches in Hong Kong and Macau, with Calyon acting as guarntor. The offer period of Allianz Dresdner’s new fund begins from 1 December and will run through 30 December, providing investors with a basket of 10 of Hong Kong's bluest chips. The asset manager’s new product aims to provide investors with 10% initial investment over the first four years and upon maturity guarantees investors 100% of the capital invested, with the added bonus of a final coupon with unlimited upside potential. The coupon’s payout will be linked to the basket performance over the five-year period and will be determined by averaging the fund’s five best fixings from its predetermined semi-annual fixing dates. According to Allianz Dresdner, the new fund will suit investors that see the potential rise in the Hong Kong market, while appealing to those who's primary concern is income and security. “The fund is designed to give a well-diversified basket and will be largely representative of how the Hong Kong will perform over the next five years,” says Eleanor Wan, adam’s head of retail business. “The unique structure protects investors from short-term volatility, yet enables them to participate in the upside of the dynamic Hong Kong economy.” The 10 names in the basket currently represent around 60% of the total weighting of the Hang Seng index and are split between the banking (40%), utilities (30%), real estate (20%) and industrials/commercial (10%) sectors. The blue chips selected by Allianz Dresdner are HSBC, Hang Seng Bank, Bank of China, Bank of East Asia, Sun Hung Kai Properties, Cheung Kong, CLP Holdings, Hong Kong and China Gas, Hong Kong Electric and MTR Corporation. As evidenced by the fund’s launch, the asset manager does see the long term upside potential in Hong Kong,, particularly stressing that the Closer Economic Partnership Arrangement (CEPA) between the territory and China and a weak US dollar will be drivers for the economy and the fund’s return. “We’re positive on the mid to long term growth of Hong Kong, and the supportive policies of China will continue to have a long term impact on the market,” says Christina Chung, a senior fund manager with adam. “The rapid increase of independent visitors from China will continue and a weak US dollar will make Hong Kong attractive to other visitors.” Adam also stresses that the end of prolonged inflation in the territory and the continual interest from mainland businesses to list in Hong Kong were motivations to launch the fund now. During the month long offer period commencing today, the minimum subscription is $3,000, with the fund officially starting on 7 January 2005, maturing on 15 January 2010.
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