New fund promises city's retirees 6pc

June Chen

The Hongkong and Shanghai Bank Corporation launched the HSBC Post Retirement Multi-Asset Fund in the city.

The fund is designed to provide retirees with a stable and predictable monthly income stream, with a fixed payout of 6 percent per annum.

The fund invests in a diversified portfolio of fixed income securities and equity securities, money market and cash instruments with the minimum investment at HK$10,000 or US$1,000 (HK$7,800).

The subscription fee would be up to 3 percent of the total subscription amount and the management fee is 0.8 percent per annum. The base currency is US dollar, but also accepts Hong Kong dollar as share class currency.

The switching fee is up to 1 percent of the switch-out proceeds.

Fixed payout classes pay out a predetermined annualized fixed percentage of their net asset value, or adjusted NAV, at a predetermined frequency. The predetermined annualized fixed percentage does not reflect either the actual or expected income or performance of the fund, according to the product brochure.

The fund's monthly payout is derived from invested assets, including income, capital gains, and return of capital. This feature is specifically designed to align with the asset conversion phase of retirement investments. Currently, the fund maintains a 63 percent allocation to bonds, primarily focusing on lower-risk bonds such as global government bonds and investment-grade corporate bonds.