HSBC’s U.S. subsidiary revealed plans to launch a new managed portfolio that invests in global companies that have a leading presence in the digital innovation space, as the bank looks to help investors take advantage of the sector's accelerated growth due to the global pandemic.
The “new discretionary management portfolio,” known as the Digital Innovation Growth Investment Theme, will spread itself across five areas: digital consumer, digital services, digital infrastructure, financial technology and health care, HSBC Bank USA said Tuesday, adding that it is seeking to achieve long-term growth of capital through the investments.
In each of the five themes, there will be a focus on individual “drivers of growth.” For example, in the area of digital consumer, there will be specific attention to e-commerce, social media and VR/AR and in the digital services theme, focus will be given to cloud computing, artificial intelligence and cybersecurity, while in digital infrastructure, there will be a focus on 5G, semiconductors and data centers.
Additionally, in the fintech space, the portfolio will zero in on payments, blockchain and insurtech, while in the health care space, it will focus on digital records, remote health care and robotic surgery.
The DIGIT aims to “capture” those digital innovation opportunities, specifically in the information technology, communications services, health care, finance and industrials sectors, HSBC said. The portfolio will invest in global corporations and will mostly diversify itself in large and mid-cap stocks, “with ETF utilization available,” the bank added.
“While digital innovation and transformation have been underway for decades, the volume and speed of recent technological advances is accelerating change across all aspects of society,” Chief Investment Officer of Discretionary Investment Management Brett Mitstifer said.
“When we look at the disruptive impact of the pandemic, many of the trends that came into play as a result have potential to permanently alter the global business landscape,” Mitstifer said. “As technology and economic growth become increasingly linked, it's critical that tech investments generate revenues, drive productivity and reduce cost, which is what we aim to leverage within DIGIT.”
Mitstifer added that while there are many uncertainties surrounding the COVID-19 pandemic, like its “pace and duration,” he anticipates that, "The landscape for adoption and utilization of digital products and services is likely to be forever altered.”
“We have seen time and again that the path to a resilient economy is through innovation and adaptation,” Mitstifer said.