Banking with HSBC

[bascom]

I've been here a few years and bank almost exclusively with HSBC. I have a Premier account, HKD/USD savings/checking, time deposit, credit cards, stock investments, MPF.

I've now got a larger sum of USD to invest. For the sake of convenience, it would be easier to stay with HSBC. But they don't seem to offer no-load funds (2.5% initial fees seem standard) and time deposit rates are very low. Their financial advisors don't seem to offer much expertise.

Can anyone suggest investments worth looking at from the HSBC world of offerings (I have a moderate risk profile). Is there another institution that can better cater to all my banking needs with better rates/lower fees?

[PDLM]

For larger sums I have started getting into some of the bonds that HSBC offers execution on. Some things that seem to me to have pretty low risks (Hutchison, PCCW) have yields over 5% in USD, and I've just bought a load of China Euro Bonds yielding 4.2%. They can often offer a bit better on the Time Deposits if you talk to your relationship manager rather than simply looking online, particularly if you are bringing new funds in from outside. I also find that reading the various Rewards offers is worth doing - by investing in certain products at certain times you can get, in effect, several tens of thousands of AsiaMiles which have a quite significant value (to me at least).

[freeier]

PDLM >
just some comments.
a bond's yield is very much tied to the interest rate of the currency, followed by the credit risk of the company.

as of now, interest rate in US is 5.25% and Europe is 4.5% thereabout. So even if you buy a risk free (i.e. government issued) bond you would have gotten that level of interest rates.

add that and the credit rating of hutchison or pccw (which are unfortunately not HSBC nor Cheung Kung), u shld be receiving more. for a matter of fact hutchison and pccw are not considered credit worthy companies. for the fact that their debt level is incredibly high. not saying that they are going to default, but u shld get higher reward for the risk you are taking.

[KnowItAll]

>> u shld get higher reward for the risk

He is. Asia miles...

[PDLM]

At a quick look, the best yield I can see on US Treasury bonds is about 4.6% (or 4.7% if I invest US$100K). I don't see Hutchison or PCCW as particularly high risk, so the extra 0.5% for Hutch and 0.8% for PCCW seems to me to be about right.

If you want higher risk then how about Bangkok Bank subordinated bonds with a coupon of 9.025%? Current yield 6.84%...

I realise I could also get a little better through places other than HSBC, but there is some value to me in terms of convenience of having pretty much everything available online through one portal (as well as the AsiaMiles).

[freeier]

u get the asiamiles buy buying pccw bonds ? that's a new thing to me. 8-) maybe its worth it then.. to achieve your million miles plateau.

the best thing to invest now might be just short term treasury bills in US. think u shld 4.89% for 1 mth, 4.98% for 3 mth, 4.95% for 6mth, all on annualized basis.

for me, i'd probably do the same (i.e. stick to hsbc for the ease and convenience) but also because i do not have much money here. but i guess when i start buying bonds i'd prefer somewhere i can get a cheaper deal. 0.5% per year is a big difference in bond context!

[PDLM]

u get the asiamiles buy buying pccw bonds ? that's a new thing to me. 8-) maybe its worth it then.. to achieve your million miles plateau.

the best thing to invest now might be just short term treasury bills in US. think u shld 4.89% for 1 mth, 4.98% for 3 mth, 4.95% for 6mth, all on annualized basis.

I get the AsiaMiles indirectly - HSBC Premier has a rewards programme which gives rewards points (which can be converted to AsiaMiles) based on investment turnover volumes and also on specific types of investments. I probably average about 30-50000 AsiaMiles a year through this. There is no Million mile plateau on AsiaMiles unfortunately - only AAdvantage has that as far as I know.

I'm not really looking for short term investments. I'm happy to invest in bonds with a view to holding for 3-5 years. Bought today, the PCCW-HKT bonds I have would yield 5.44%, which is still 0.5% better than your best Treasury rates.

[bascom]

What about the mutual funds available through HSBC? Are there any no-load index or balanced funds available? While HSBC Online is a pretty good system, the screening tool is not of much help. Alternatively, are there any exchange traded funds other than the Tracker fund?

When I met with the HSBC advisor, she only handed me some overviews of Merrill Lynch & Invesco balanced funds as "examples" of funds I might consider.

Is Manulife the only local provider offering funds without initial charges?

[dshe]

You can invest more efficiently by buying shares youself through a discount broker. On SEHK, there is only one fund with decent liquidity, TraHK, which tracks the Hang Seng index. But don't trade often! High commissions, stamp tax, other fees and wide fixed spreads make trading in Hong Kong cost around 10x that in US markets.
In US, you can buy MSCI Hong Kong ETF and FTSE/Xinhua China 25 ETF, which have excellent liquidity, but the fund expenses are higher (than TraHK) and there is witholding tax on dividends.

[dshe]

I suggest you invest more efficiently by buying shares yourself through a discount broker.

http://www.hkex.com.hk/invest/ors/brokerlist.htm

On SEHK, several funds are listed, but the liquidity is low, except for A50 China Tracker which tracks China A-Shares, and TraHK, which tracks the Hang Seng index.

Note that high commissions, stamp tax, other fees and wide fixed spreads make trading in Hong Kong cost around 10x that in US markets!

In US, you can buy MSCI Hong Kong ETF and FTSE/Xinhua China 25 ETF, which have excellent liquidity and tight spreads, but the fund expenses are higher (than TraHK) and there is witholding tax on dividends.