• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

S. Vaidya Nathan

AN INVESTMENT may be contemplated in the HSBC Equity Fund as it continues to remain one of the superior performers. It has an impressive track record since its launch in December 2002. The portfolio as of end December 2004 also appears to hold promise of further gains. The fund should continue to outperform most peer funds as well as the benchmark index, the BSE-200

Over the past year, the NAV has risen by about 38 per cent even as the benchmark rose 16 per cent. Going forward, the degree of excess returns over the benchmark may not be as high as it was in the initial 15 months. Over the past six-month period, the fund generated excess returns of just about five percentage points; for the past three months, its NAV has moved lockstep with the benchmark.

As stock values have been marked up sharply, stock selection and timing would have to be right more often than in the past if the fund is to outdo the benchmark even by 5-10 percentage points. This does not detract from the attractiveness of the fund as it has managed to maintain an impressive card in 2004 despite a sharp rise in its asset base; the latter has risen by about 40 per cent to about Rs 1,600 crore compared to the level that prevailed six months ago.

The performance in 2004 — HSBC Equity was among the top 15 funds and had the highest returns for a fund of its size — must be seen in the context of its stellar showing in 2003, when it notched up gains of about 150 per cent. The returns are superior if one considers the large-cap tilt that the portfolio has. This is less pronounced now than in its initial months as it has moved into mid-cap stocks over the past year.

Suitability: The risks associated with the fund are in line with those one associates with a diversified fund. On a risk-adjusted basis, the returns are attractive; this fund ought to figure among the top choices for a portfolio of funds along with the likes of HDFC Long Term Advantage, HDFC Top 200, Templeton India Growth, Franklin Prima and Reliance Growth.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Crumbling in, for your safety

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line