HSBC plans application of 25 by 4% strategy to Euro Equity range

HSBC Asset Management is planning to change the investment approach on its GIF European Equity fund after turning around performance on European Growth using the same method.

The group will apply its 25 by 4% formula to the fund, forcing the manager to split assets equally across the portfolio. The approach, which was first introduced in the £47.92m HSBC GIF UK Equity fund, restricts the manager to 25 positions and requires him to establish a 4% position when purchasing a stock, rebalancing as necessary. The performance of European Growth has improved considerably after the appointment of Nick Dowell as manager in late 2007 and the introduction of the 25 by 4% structure in September 2008. The fund has risen from 76th out of 87 in the European ex UK peer...