HSBC Asset Management ( HSBC AM ) has launched, for retail investors in Hong Kong, its HSBC Post Retirement Multi-Asset Fund that is designed to provide retirees with a predictable, monthly income stream through active asset allocation in a diversified portfolio, which includes fixed income, equity securities, and money market and cash instruments.

Post-retirement financial planning, the asset manager says, is an emerging concept that holds significant importance in today’s environment, particularly for families, as the rising cost of living necessitates larger reserves to support family expenses, including children’s finances.

On average, up to 20% of affluent parents, according to the HSBC Premier Affluent Survey, which surveyed over 1000 individuals in Hong Kong, continue to support their children financially until the age of 64. This underscores the importance of proactive financial planning, not only ahead of retirement but also in the post-retirement phase.

The fund invests in a diverse range of asset classes globally to enhance diversification and risk management while pursuing potential capital growth with a collective risk profile suitable for retirees. Its portfolio allocation, as of end of August, the asset manager notes, includes 26% in equities for growth, 57% in lower risk bonds for resilience, a modest 6% in higher-yielding fixed income for income potential and 12% allocated to cash and non-traditional asset classes, such as commodities, for additional diversification. 

Notably, the fund offers fixed monthly payouts at an annualized payout rate of 6% with no lock-up period. Investors have the flexibility to redeem their investments at any time without redemption charges for unexpected needs.  The minimum investment threshold is US$1,000 or HK$10,000. 

There is a subscription fee of 3% of the total subscription amount and an annual management fee of 0.8%. The base currency is in US dollars with share classes also available in HK dollars.

“Amid fluctuations across various business cycles, investors must not only focus on accumulating their wealth during their working years,” says Daisy Ho, the asset manager’s Asia-Pacific CEO, “but also prioritize maintaining their wealth and generating a monthly income that can cover their expenses after retirement.”