HSBC Equity Fund: Invest with an horizon of 3 years

HSBC Equity Fund belongs to Large cap category with the major exposure in the Banking sector. The Crisil has ranked this fund as �Rank 3� which indicates an average performer in the respective category. Investors seeking exposure in large cap segment with an investment horizon of 3 years or more can look out for investing in this fund, reckons financial advisor Arnav Pandya.

• This fund had the highest exposure to banks with 18 per cent of the portfolio in this area at the end of February 2010. This was followed by software and petroleum products. The fund had Infosys as the top holding at 6 per cent of the portfolio and this was followed by BHEL and Reliance Industries.  HDFC Bank, L&T,ONGC were some of the other stocks with a high exposure.  The fund was underperforming the benchmark the BSE 200 over the one year time period but outperforming over the three and five year periods.
• Six months later banks remained at the top of the sector holdings list but petroleum products edged into the second place. This was followed by oil, software and consumer non durables.  Infosys remained the top holding with over 6 per cent of the portfolio in this company but this was followed by a lot of holdings that were close to each other like BHEL, Reliance Industries, HDFC, L&T and HDFC Bank. The turnover ratio of the fund dropped significantly to just over 1 times and it remained an underperformer over the one year time period.
• There was a slight bit of reshuffle in the position of the sectors because while banks remained at the top of the sector charts at the end of February 2011 this was followed by software and consumer non durables.  Infosys was the top holding followed by Reliance industries and it is also significant that there were three banks that had an exposure of more than 5 per cent in the portfolio.  The fund managed to improve its performance and was now an outperformer over the one, three as well as five year time periods.
• The funds turnover ratio was at 1.2 times at the end of August 2011 but this did not impact the top three sectors which retained their position from six months ago. Thus banks, software and consumer non durables continued to lead the field.  HDFC Bank was now the top holding in the fund followed by Infosys and ITC.  L&T, HDFC, Reliance Industries and BHEL were some of the other companies with a high exposure.  The fund was outperforming the benchmark over the one year time period but not the three year period.
• Banks continued to be at the top of the holding charts at the end of February 2012 with 17 per cent of the portfolio in this area. This was followed by software and consumer non durables and petroleum products. In terms of the top holding HDFC bank now had an exposure of more than 7 per cent.  Reliance and Infosys were next followed by a bunch of companies like ICICI Bank, ITC and Grasim which had a 5 per cent plus exposure. The fund remained an outperformer over the one year time period but not the three year one.
• This fund is meant for investors who want a broad based large cap stocks exposure in their portfolio. It is suitable for all those who have a time horizon exceeding 3 years for their investments and also those who are able to wait patiently for the holdings to deliver.