Investing

HSBC offers a range of unit linked funds that give you access to different types of indirect investment.

What is indirect investment?

Indirect investment is a simple and effective way of investing in stocks and shares, without getting involved in the problems and costs of buying and selling shares on your own account.

Money from a large number of investors is pooled and invested in a portfolio of stocks and shares. These are selected and managed on your behalf by our fund managers.

The fund is divided into many small parts known as units. This is why it is often referred to an a "unit-linked" fund. The price of each unit will depend on the value of the underlying investments. So when you invest, the number of units you receive will depend on how much you invest and the buying price of the units at the time of your investment.

Types of indirect investment

Share or Equities
Shares or Equities are shares in UK or overseas companies or shared based investments linked to the stock market. As their value depends on the success of the company, their value can fall as well as rise. They’re considered more risky when compared to bonds or cash, but are also expected to provide the greatest potential return over the longer – term. Shares may suit people with more than five years to retirement.

Property
UK properties that are leased by commercial, industrial and rental companies who pay rent to the owner. Rental income and property prices can fall as well as rise. Property is considered to be more risky than bonds but less volatile than shares. Property may suit people with more than five years to retirement.

Bonds
Bonds are fixed income investment, usually paying interest for lending money to a company (corporate bond) or government (gilt). Their value can fall as well as rise over their lifetime but are considered to less risky than shares over the short-term. Bonds may suit people with less than five years to retirement.

Cash
The Cash Fund works in a similar way to cash being put into a deposit account with a building society or bank. Your money will be invested in a diversified portfolio of short-term high quality money market instruments such as short-term deposits and commercial paper. There is a risk that the institution that issues the instrument could default, leading to an investment loss. The real value of your investment and the resulting income you can receive from your pension can also go down over time because of the effect of inflation. Cash can be used to protect investments in the short-term, but historically has provided much lower returns than bonds or shares over the longer term, although past performance is not necessarily a reliable guide to future returns. The Cash Fund may suit people just about to retire.