The Hindu Business Line : HSBC Mutual

THE market saw some volatility in August, but managed to reach new highs. Below-normal rainfall during the month did not dampen sentiments. Liquidity continued at same levels, as foreign institutional investors and domestic mutual funds remained net buyers in August. We take a look at how HSBC Mutual Fund managed its equity scheme last month.

HSBC Equity fund has an objective of long-term capital growth through a portfolio of equity and equity-related securities. The fund has about 60 stocks in its portfolio and is benchmarked to the BSE-200.

Close to 10 per cent of the net asset value of HSBC equity fund was concentrated in the stock of HCL Infosystems. The weights of State Bank of India, Mahindra & Mahindra and Patni Computers were also in the 5-6 per cent range, and these stocks remained in the top holdings list.

HSBC Equity increased its exposure to mid-cap stocks by 3 per cent. The increase may be seen in the light of smart rally stocks in this space during August. A sector-wise study revealed that over the month the fund reduced its exposures to petroleum products, marked by an exit from Indian Oil Corporation. Among other sectors, fresh entry into S. Kumar's Nationwide ensured a more than 2 per cent weight to the textiles portfolio.

The fund continued its neutral approach to the finance sector. While it exited Syndicate Bank, fresh exposures were made in Centurion Bank and Oriental Bank of Commerce.

Cement stocks lost favour and their total weight in the portfolio was reduced to 3.9 per cent from 5.4 per cent in July. Ultratech Cement made an exit.

Among the stocks which recently entered the capital market through initial public offers, IL&FS Investsmart and Yes Bank were removed from the fund's portfolio while IDFC made an entry. HSBC Equity Fund was launched in 2002 and had Rs 1,230.2 crore worth assets under its management as on August 31.

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