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HSBC Equity Fund: Not suitable for conservative investors

HSBC Equity Fund is an open ended fund that aims to generate long term capital by mainly concentrating wealth in the Large cap space. According to Arnav Pandya, investors with conservative outlook should look out for other alternative in the large cap space.

May 17, 2013 / 12:44 PM IST

HSBC Equity Fund is an open ended fund that aims to generate long term capital by mainly investing in Large cap space. The fund has decade old history for investors to gauge its performance. It has delivered decent performance in the past but has not been able to beat its benchmark in recent times. According to Arnav Pandya, investors with conservative outlook should look out for other alternative in the large cap space.


Nature: Equity oriented open ended Large cap


Inception: December 2002


Assets under Management: Rs 552 crore at the end of February 2013


Fund Manager: Tushar Pradhan


Analysis



  • This is the leading scheme from the HSBC Mutual fund stable in the country. At the end of July 2011, Banks were the top sector in the portfolio with a 19 per cent share. Software was the only other sector that had a share in double digits. The portfolio turnover ratio was 1.34 times and Infosys was the top individual holding in the portfolio. HDFC Bank, ICICI Bank, Reliance Industries, ITC and L&T were some of the other top holdings in the fund. The BSE 200 was the benchmark index for the fund and it was an outperformer over the one and five year periods but not the three year one.
  • Six months later, Banks and Software remained the top two sectors in the portfolio. Consumer non durables, petroleum products and oil were some of the other areas with a significant share. The portfolio turnover ratio had dipped to 0.8 times. HDFC Bank was now the top holding. Reliance Industries, Infosys, ICICI Bank, Grasim, ITC and TCS were some of the other top holdings.  The fund was an outperformer over the one year period but not the three year one.
  • At the end of August 2012, Banks remained the top sector and its share had even gone up to over 21 per cent of the portfolio. Consumer non durables had climbed to the second spot with software and petroleum products following. HDFC Bank was the top holding in the portfolio with ITC, ICICI Bank, Infosys, Reliance Industries, L&T, ONGC and HDFC being some of the other leading stocks in the portfolio. The fund had slipped slightly on the performance charts below the benchmark for both the one and the three year time periods.
  • Banks maintained their top position with a 21 per cent share of the portfolio at the end of February 2013. Software, auto, petroleum products and oil were some of the other leading sectors in the portfolio. The portfolio turnover ratio had dipped to 0.15. ICICI Bank was the top holding in the portfolio. ITC, Infosys, HDFC Bank, Grasim, HDFC, ONGC, Reliance Industries were some of the other top holdings. The fund was an underperformer over the one and three year time periods.
  • The fund has not been able to consistently beat its benchmark in recent times. Conservative investors can look for alternate opportunities for their portfolios in the large cap space.

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