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HSBC Fund Institutes Currency Hedging

By Staff Writer

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GUERNSEY, Channel Islands (HedgeWorld.com)–HSBC Global Absolute Ltd., a closed-end fund of funds listed on the London Stock Exchange, announced the introduction of currency hedging for its sterling-denominated shares.

HGAL launched in November 2001, with the objective of achieving equity-like returns with lower levels of volatility. At launch, its investment advisers at HSBC Republic Investments Ltd., London, decided not to include currency hedging.

Subsequent weakening of the U.S. dollar against the pound has adversely affected the underlying holdings. From launch until October 2004, the net asset value per share rose 13.8% in U.S. dollar terms but fell 12.8% in sterling value.

Accordingly, at an extraordinary general meeting, Nov. 28, shareholders approved a plan to reclassify the shares in HGAL as U.S. dollar shares and sterling hedged shares.

The sterling hedged shares will constitute an attractive opportunity for sterling currency investors, said Paul Dunning, chief executive of HSBC Republic, in a Nov. 30 announcement of this vote. It will provide “access to some of the world’s top-performing hedge fund managers” along with “a low-risk perspective,” he added.

HSBC Republic is a member of the HSBC Group, one of the world’s largest banking and financial services organizations, and operates within the HSBC Private Bank network.

Contact Bob Keane with questions or comments at [email protected].