The Hindu Business Line : HSBC Midcap Equity Fund

HSBC Midcap Equity Fund has stuck to its mandate, with 70 per cent of its assets invested in stocks with a market capitalisation of less than Rs 2,000 crore. We examine the reshuffle made during the period February 2006 and April 2006.

The fund held around 45 stocks on an average over the period. Exposure in the top five stocks has declined to 17 per cent from 22 per cent.

Sector shuffle: In the construction space, the asset allocation came down marginally; the fund booked profits in Mahindra Gesco Corporation. The exposure to Shree Cement was increased on expectation that there could be some steam left.

The banking sector underwent some churn. The fund exited Federal Bank and cut exposure to Karnataka Bank, Bank of Maharashtra and Karur Vysya Bank.

In the consumer non-durables sector, HSBC Midcap booked profit in Triveni Engineering and reduced exposure to Hindustan Sanitaryware, Dwarikesh Sugar and Balrampur Chini Mills.

Exposure to media and entertainment sectors increased marginally. Recently listed stock Inox Leisure was the new entrant, while holdings in New Delhi Television were trimmed. Exposure to stocks such as Deccan Chronicle Holdings, PVR, and Television Eighteen India went up. In the engineering sector the fund booked profit in Everest Kanto Cylinder, increased exposure to Sintex Industries, and pared exposure to BOC India.

Like other funds, this fund, too, increased exposure to the hotel sector, adding Royal Orchid Hotels even as it booked profit partially in Hotel Leelaventure. In software, the exposure to Mastek increased and Educomp Solution was the new addition. Its stake in Prithvi Information Solution decreased marginally.

The fund added the oil and gas sector to its portfolio, although the only stock to represent it was Gujarat State Petronet.

The allocation to textile sector increased two-fold. The only stock with market capitalisation above Rs 5,000 crore in the portfolio was Aditya Birla Novo. Alok Industries found its way into its fold. There was a minor rejig in the pharmaceutical sector, with the cut in exposure to IPCA Laboratories. The stock of RPG Life Science was the fresh addition to the portfolio.

The fund trimmed its exposure to the metal space ahead of the recent meltdown. Jindal Stainless made an exit. Exposures were reduced in Maharashtra Seamless and Welspun Guj Stahl Rohren.

Fund facts: HSBC Midcap Equity Fund was launched in May 2005. The asset base was about Rs 530 crore .The fund is managed by Mr K.R. Shanbhag.

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