The Hindu Business Line : HSBC India: Driven by advancing equity market

HSBC's India Fund, which at $6 billion is arguably the largest of its kind, is growing exponentially, its growth being driven by the country's advancing equity market.

The fund, which is significantly exposed to large-cap stocks, is being lapped up by investors who wish to gain from the buoyant Indian scenario.

Such buoyancy has been reflected in the rising indices, the most popular of which, the Sensex currently stands well beyond the 13,000-mark.

The India Fund, said Mr Mihir Vora, Head of Fund Management - Equities, HSBC Asset Management (India), has grown to its current size because of the local market's performance in the last three years or so.

In comparison, HSBC's China Fund has a relatively small size - about $3 billion. HSBC has lately introduced a separate fund for the BRIC (Brazil, Russia, India and China) nations as well. Of these emerging markets, India has, so far, accounted for a decent portion of its allocation.

"A number of large-caps have had a good run. The fund's strategy to invest in these stocks has paid," Mr Vora observed, adding that in the Indian context too, large-caps have accounted for a critical portion of HSBC Mutual Fund's exposure to equities.

HSBC Equity, which has over Rs 1,000 crore under management, already has a number of leading stocks, including a sprinkling of the index heavyweights, in its portfolio.

Mid-cap counters, on the other hand, may sometimes be constrained by a relative absence of liquidity and HSBC MF will take a guarded approach to the mid-cap segment, it is pointed out.

Its mid-cap fundhas not seen too large inflows in recent months. However, there have not been serious outflows either, Mr Vora stated.