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Index-based investing

Index fund management has been at the heart of our business strategy since 1988; with this strong heritage we have developed our strategies to evolve with changing markets and client objectives.

Our philosophy

Passive funds are only as good as the indices they track. Index selection is a major contributing factor to strong investment performance.

  • We select indices with the greatest transparency and liquidity that capture the best possible representation of the market
  • We take a pragmatic approach to managing index funds with two equally important objectives: close tracking and increasing risk-adjusted returns

Our process

Our tracking methodology and management approach focus on adding value; we aim for returns that closely track the index, while remaining within target tracking tolerances.

  • Our teams have a clear focus on managing risk at the start of the portfolio construction process and on a daily basis thereafter
  • We minimise explicit and implicit transaction costs to mirror index returns as closely as possible
  • Portfolios are implemented using physical replication and optimisation
  • Intelligent and efficient handling of index changes, corporate actions and dividend enhancement

HSBC strengths

  • The large scale and the diversity of our index strategies allow us to deal at competitive prices and minimise costs for our clients
  • Our index-based strategies cover global, regional and country indices using multiple vehicles such as ETFs, pooled funds, segregated mandates

Cost-efficient index replication


  • Efficient exposure to a broad range of traditional market-cap indices
  • Transparent end-to-end process focused on minimising implementation costs
  • Disciplined risk-controlled investment approach
  • Physical replication (full or optimised)
  • Intelligent implementation of index changes, corporate actions and dividend enhancement

Passive implementation

  • Global, regional and single country indices
  • Multiple vehicles: ETFs, pooled funds, segregated mandates
Risk Warning
The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. The value of the underlying assets is strongly affected by interest rate fluctuations and by changes in the credit ratings of the underlying issuer of the assets.