Financial Daily from THE HINDU group of publications
Sunday, Oct 03, 2004
Financial Daily from THE HINDU group of publications Sunday, Oct 03, 2004 |
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Investment World
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Mutual Funds Markets - Mutual Funds Fund Talk
I would like to invest in diversified equity funds with a five-year investment horizon. Which is the better fund — Franklin Bluechip Fund or HSBC Equity Fund? If I move to Chennai, will it make a difference to my investment? -- Sathyan Rajendran New Delhi Both the funds you have picked are good choices though they differ slightly in their investment strategies. Launched in 1993, Franklin India Bluechip has a much longer track record than HSBC Equity Fund, and has beaten the Nifty in each of the past six years. HSBC Equity Fund, launched in December 2002, lacks as long a track record by which to judge its performance. But the fund has fared well since launch, featuring at the top of the performance charts during bullish as well as bearish phases in the market over the past two years. The fund's returns are also superior to that of Franklin India Bluechip in the period since its launch. Franklin Bluechip is focused almost entirely on large cap stocks of well-established companies and takes largely a bottom-up approach to investing. In contrast, HSBC Equity Fund uses a top-down approach to select sectors and has invested a portion of its portfolio in stocks of mid-sized companies. This approach has paid off over the past couple of years, given the re-rating of mid-cap stocks. Going forward, the mid-cap universe may continue to offer greater opportunities for discovering under-researched stocks that offer good value, than does the large cap universe. Therefore, if you are looking for a fund with a high return potential, albeit with a slightly higher risk profile, HSBC Equity Fund should be your investment choice. If you derive comfort from a longer track record and seek returns that are broadly in line with the market, Franklin India Bluechip should be your investment choice. As both funds have a distribution and servicing network that covers all major metros, a change of place would not make any difference to your investment.
(Queries may be e-mailed to mf@thehindu.co.in, or sent by post to Business Line, 859/860 Anna Salai, Chennai 600002.)
Aarati Krishnan
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