Investment firm seeks adjustments to emerging-market strategy as a result of uncertainty over Russia
HSBC Global Asset Management (Canada) Limited has announced proposed amendments to the HSBC BRIC Equity Fund.
The firm intends to amend the investment goals of the fund, pending unitholder approval, effective on or about December 2, 2022.
Currently, the fund aims to provide long-term capital growth by investing primarily in equities and equity-related securities of companies in selected emerging market countries. The proposed changes would have the fund invest in equities of companies of all sizes in emerging markets around the world, either directly or indirectly.
The investing methods and fund name will also change, depending on whether the new investment objectives are accepted.
A special meeting of the fund's unitholders will be conducted to discuss the adjustment on or around November 9. The fund will also be closed to all acquisitions by current and new investors, including purchases made under a pre-authorized contribution plan or other pre-authorized purchase schemes, starting on or around September 2, 2022.
The modifications are being suggested in reaction to the unpredictability surrounding the fund's capacity to invest in Russia, one of the four EM countries the fund currently invests in, as questions around sanctions, governmental restrictions, and market liquidity remain unanswered.
The proposed adjustments, in the opinion of the firm’s portfolio management team, will preserve exposure to the markets the fund presently invests in while providing unitholders with the advantages of a larger, more diversified emerging markets approach.
After reviewing the potential conflict of interest issues connected to the proposed changes, the fund’s Independent Review Committee concluded that, if implemented, the changes would produce a fair and reasonable outcome for the fund.
A notice-and-access document for the meeting will be mailed in September to unitholders with records as at September 20, 2022.