HSBC Malaysia kicks off Luxury Index for wealth clients

By ANIS FARHANAH MALEK
anisfarhanah@dagangnews.com

KUALA LUMPUR 15 March - In addition to standard and thematic market indices, HSBC Bank Malaysia Berhad (HSBC Malaysia) has rolled out the Solactive Luxury Dynamic Factors Index (the Luxury Index) which is made available as both a conventional and a shariah-compliant solution. 

It said, the index provides an investment opportunity for all HSBC Malaysia’s wealth clients to capitalise on the growing luxury consumption in Asia. 

This highlights HSBC Malaysia’s commitment to introduce innovative products that enable Malaysian investors to capture growth opportunities arising in new consumer trends, the bank further noted. 

“This Luxury Index provides investors dynamic exposure to a list of global stocks that have high exposures to the luxury sector. 

“The Luxury Index will also be made available in other key wealth markets in Asia,” said HSBC Malaysia in a statement today.

The Luxury Index aims to generate potential positive long-term returns and build wealth for the bank’s clients by utilising three measures which are 1) capture the luxury trends, 2) well-established stock selection principles and 3) volatility control. 

Head of Global Markets, HSBC Malaysia, Alvin Kong in the same statement said, to accelerate the growth of the wealth business in Asia, Global Markets continues to invest in their product manufacturing capabilities leveraging its market expertise, and deliver bespoke solutions for wealth clients. 

“The Luxury Index sits within our theme of stocks benefiting from Asian discretionary spending. Against the backdrop of the COVID-19 crisis, luxury as an investment theme is poised to benefit from strong economic recovery led by Asian economies.

“HSBC Global Research estimates that the luxury goods market in mainland China will likely achieve double digit growth in 2020, doubling its overall share of the global luxury market in 2020 with further growth expected through to 2025,” he added.

Meantime, Head of Wealth, Wealth and Personal Banking, HSBC Malaysia, Jon Chivers said that the index-linked structured product exemplifies their commitment to meet clients’ diverse wealth management needs aligned to prevalent investment themes even in these trying times. 

He added, the Luxury Index enables investors to gain exposure to the sector, while maintaining a high level of principal protection.

The structured products linked to the Luxury Index will be denominated in Asian currencies (RM in Malaysia, RMB in Hong Kong) in either a fully or partially principal protected structured product. 

In addition to having a risk control feature, the Luxury Index is designed using a method known as smart beta or factor investing, a first for HSBC Malaysia, which is an investment technique among institutional investors that is based on a rules-based approach focused on persistent sources of returns in the equity market. - DagangNews.com