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HSBC Asset Management Company has launched an open-ended HSBC Large and Mid Cap Equity Fund that will capture the growth opportunities in both large- and mid-cap stocks.
The new fund offer will close on March 25 and the minimum investment during the NFO has been fixed at ₹5,000.
Risk-adjusted returns
The new fund provides relatively lower volatility and consistent performance with optimal allocation to large-cap stocks. In any given point of time, the fund will allocate about 35 per cent in large-cap stocks andthe rest in mid-caps as they offer accelerated growth and increases the possibility of alpha generation.
A larger allocation to mid-cap stocks helps generate better risk-adjusted returns, said the fund house.
Ravi Menon, CEO, HSBC Global Asset Management (India), said the fund house has been launching new schemes in a disciplined manner and has not come to the market with an offering unless it is confident of the growth potential.
The last fund offered by the fund house was HSBC Equity Hybrid in September that collected about ₹640 crore, he added.
Tushar Pradhan, Chief Investment Officer, said there are about 15 similar schemes from different fund houses but most of them are large in asset size and find it difficult to maintain the minimum investment of 30 per cent in the mid-cap space as prescribed by SEBI.
“We have an advantage because we are starting from zero. Any fund house which manages over ₹10,000 crore in similar schemes may find it difficult to maintain the minimum investment limit in the mid-cap space,” he added.
Even though more money is chasing few stocks, Pradhan allayed the fear of a bubble in the mid-cap space given the growth potential in these companies.
Moreover, he added a bubble is not visible unless it is burst.
The fund house is bullish on consumer discretionary spending and financial sectors.
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