HSBC Mutual Fund has announced that the HSBC Multi Cap Fund, an open-ended equity scheme investing across large-cap, mid-cap and small-cap stocks, will open for subscription on January 10, 2023. The new fund offer (NFO) will remain open till January 24, 2023.
The idea behind this fund is to provide long-term wealth creation by investment in equity and equity-related securities across market capitalisation. The multi-cap option ensures that investors stay invested in multiple sectors, themes and market capitalisations. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.
The minimum subscription amount is ₹5,000, and in multiples of Re 1 thereafter. One may make an additional investment of ₹1,000 per application and in multiples of Re 1, thereafter.
Both the regular and direct plans are available under this scheme. The regular and direct plan will have two options, viz., Growth and Income Distribution cum Capital Withdrawal option (IDCW) with the payout of IDCW and reinvestment of the IDCW sub-option. Both systematic transfer plan (STP) and systematic withdrawal plan (SWP) facilities will be available only after the plan under the scheme re-opens for continued sale and purchase.
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.
There are lots of benefits in store for investors parking money in these funds. This is due to the fund’s flexible asset allocation strategy, which allows it to go overweight on a specific market cap during a favourable market cycle, as well as 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 a 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 remaining invested for long periods of time for compounding benefit.”
HSBC Multi Cap Fund will be managed by Manghat, 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.
This fund will track NIFTY 500 Multicap 50:25:25 TRI as the benchmark. This scheme, like other funds, has no entry fee. However, the mutual fund house charges exit load subject to certain conditions. There is no exit load if the units redeemed or switched out are less than 10 percent of the units purchased or switched in within a year of allotment. The exit load is one percent if units redeemed or switched out are over and above the limit within one year from the allotment date.
The Risk-o-meter describes the scheme as one with very high risk. This relatively risky investment option is best suited for those seeking long-term capital appreciation, though investors should consult with their financial advisors to determine if the product is appropriate for their investment portfolio.