by Suman Gupta
Monday, January 9, 2023: HSBC Mutual Fund today announced the launch of HSBC Multi Cap Fund – an open-ended equity scheme investing across large cap, mid cap and small cap stocks.
The new fund offering (NFO) opens on 10 January 2023 and closes on 24 January 2023. The HSBC Multi Cap Fund aims to provide long-term wealth creation by investment in equity and equity related securities across market capitalization.
The fund will have minimum weightage to large, mid and small caps (minimum of 25% in each) and flexible allocation of balance up to 25% to equity or debt securities and money market instruments. Given this structure, the fund has the potential to offer effective diversification.
With HSBC Multi Cap Fund, the first NFO post the acquisition of L&T AMC and schemes of L&T Mutual Fund by HSBC Asset Management (India) Private Ltd (HSBC AMC), HSBC Mutual Fund now offers funds in most of the categories as per the Securities and Exchange Board of India’s classification of mutual fund schemes under the regulations on categorization and rationalization of mutual funds.
HSBC Securities and Capital Markets (India) Private Limited holds 100% of the paid-up equity share capital of HSBC AMC.
On and from the close of business hours on November 25, 2022 (“Completion Date”), the schemes of L&T Mutual Fund were transferred to and forms part of HSBC Mutual Fund
(“HSBC MF”) and the HSBC AMC and its nominees had acquired the entire share capital of L&T AMC from L&T Sponsor and its nominees.
HSBC Mutli Cap Fund will be managed by Venugopal Manghat, CIO—Equities, Sonal Gupta, Head of Research—Equity, and Kapil Punjabi, Senior Vice President and Fund Manager— Fixed Income for Domestic equities, overseas investments and fixed income investments respectively by the Scheme.
The fund’s unique investment-strategy will:
- Focus on strong businesses with sustainable profitability, higher earnings potential and reasonable valuations
- Focus on bottom up stock picking and strong franchises—enable to achieve all season performance with the combination of large, mid and small caps in the portfolio
- Offer relatively more diversification and potential to deliver better risk adjusted performance
The benefits and features of HSBC Multi Cap Fund include:
- Well researched large caps have visibility on earnings growth with proven business and track record, enabling steady wealth creation.
- Mid caps are usually subject to mis-appraisal and mis-pricing as they are relatively under owned stocks—providing tremendous growth potential.
- Big opportunities through small caps as they may offer valuation discount on account of under-research/under owned features.
- Flexible asset allocation strategy for part of assets help as fund can go overweight on certain market cap in favourable market cycle or debt securities and money market instruments. This enables the investors to access benefits in multiple market cycles through one fund
Commenting on the launch of the HSBC Multi Cap Fund, Kailash Kulkarni, Co-CEO, HSBC Asset Management (India) Private India, said, “With the launch of HSBC Multi Cap Fund, we are providing investors with an opportunity to benefit from investing across large cap, mid cap and small cap stocks. With one fund, investors get three benefits: Large caps offer lower probability of negative returns or limit downside within equities over the long term, mid caps have more potential of delivering high growth and small caps offer more probability of delivering high alpha.”
On investment strategy, Venugopal Manghat, CIO-Equity, HSBC Asset Management Company India, said, “We stay true to our investment strategy for each scheme and remain consistent with its investment objective. Our investment strategy across schemes follows a more bottom-up approach. We evaluate companies on multiple parameters such as capital allocation and returns, competitive advantages, business potential, management, profitability and others. We keep the strategy simple and look forward to remain invested for long periods of time for compounding benefit.
