The Hindu Business Line : HSBC India fund crosses $1-b mark

A bullish equity market in the country, which has already driven the lead BSE and NSE indices to their all-time highs, has helped the fund draw investors towards it over the past 12 months or so. Its one-year performance has not been too dissimilar from that delivered by the growth fund managed by HSBC in India.

The strategies essentially pursued by the India fund (officially known as HSBC GIF Indian Equity) apply to the domestic scheme as well, said Mr Sanjay Prakash, CEO of HSBC MF. The former uses top-down analysis from the HSBC Global Investment Strategy group and blends it with research by fund managers. In recent times it has taken exposure to sectors like chemicals, software, pharma and auto/auto ancillaries.

HSBC MF, which follows neither a wholly value-driven nor a wholly growth-driven investment style, calls itself a `business cycle investor'. However, in India it has just one equity product so far. HSBC Growth Fund — its NAV currently stands at around Rs 28 — had an asset base of Rs 557 crore as on December 31, .

According to Value Research, returns since launch (that is, end-2002) stood at 148 per cent as on that date.

HSBC Growth Fund, which is primarily invested in large-cap stocks, is now being followed up by another equity-oriented scheme. The latter will be flexible to an extent, with room for stocks of varied market capitalisation, including some medium-cap ones. The two funds, it is pointed out, will be positioned differently in the market.

To introduce PMS: HSBC MF has proposed to introduce a PMS (portfolio management service) with a view to cater to a select set of clients. It expects to apply to SEBI for a licence.

PMS, as a model, has a distinct potential in the rapidly changing Indian scenario, which has lately seen an increase in the number of discerning investors, Mr Prakash felt. "For us, the PMS proposal makes sense as it can be an extension of our existing asset management functions," he said.

A number of other fund houses already offer the service. These include such major players as Prudential ICICI MF, HDFC MF and Birla MF. Deutsche MF, a relative newcomer, is among the latest to propose its own version.