HSBC International is following the recent flood of investment product distributors offering property-linked investments. The offshore arm of HSBC has structured a fund offering investors the upside of the
FTSE EPRA/NAREIT Euro Zone Index, which references European real estate companies and investment trusts, plus capital protection. A structuring official at HSBC said the product is different to others on the market because it taps European property, excluding the U.K. "There's a perception European [ex-U.K.] property is undervalued, and U.K. and U.S. property markets are overheating," he noted.
HSBC International hedged the five-year note through its parent bank in the City, said the structurer, who declined further comment on the hedge. He noted initial feedback from distributors has been positive, but it is too early to estimate how much investment it will attract. The fund is available from today for U.S. dollar and sterling investors. Sterling investors will have a 65% participation in the index and U.S. dollar investors will have 60%.
