HSBC Mutual Fund announced the launch of the HSBC Consumption Fund, an open-ended equity scheme following a sectoral or thematic theme.
The scheme opened for public subscription on August 10, 2023, and will close on August 24, 2023. The scheme re-opens for continuous sale and repurchase on September 07, 2023.
What kind of mutual fund scheme is this?
This is an open-ended equity scheme following a sectoral or thematic theme.
Commenting on the launch, Kailash Kulkarni, CEO, HSBC Asset Management Company (India) said, “The consumption story in India is driven by several factors including rise in disposable income and expansion of the middle-income segment. With Indians now becoming far more aspirational, there is a sea change in their consumption and spending patterns, strongly backed by digitization. These factors will drive strong consumption spending in the coming decade. To add, consumption is 60 per cent of India’s GDP and a large part of the listed space. Overall, we believe that it is a very exciting time ahead for consumption as a theme. Our fund will explore the right opportunities arising out of broader trends to help our investors achieve their long-term wealth creation goals.”
What is the main objective of investing in this fund?
The investment objective of the fund is to generate long-term capital growth from an actively managed portfolio of equity and equity-related securities of companies engaged in or expected to benefit from consumption and consumption-related activities. However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved.
Venugopal Manghat, CIO-Equity, HSBC Asset Management (India) said, “The consumption fund will use a blend of top-down and bottom-up approach to invest in equity and equity-related instruments. Investments will be pursued in sectors engaged in or expected to benefit from consumption and consumption-related activities. While selecting companies, we will focus on fundamentals of the business, industry structure and relative business strength amongst peers, quality of the management, sensitivity to economic factors, the financial strength of the company, and the key earnings drivers.”
How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation (% of net assets) of the scheme’s portfolio will be as follows:
| Instruments | Indicative allocations (% of total assets) | Risk Profile | |
Minimum | Maximum | ||
Equities & equity-related securities of companies engaged in or expected to benefit t from consumption and consumption-related activities | 80% | 100% | Very High |
Equity and equity-related securities of companies other than consumption and consumption-related activities | 0% | 20% | Very High |
Debt Securities & Money Market instruments (including Cash & cash equivalents, units of Liquid and Overnight mutual funds) | 0% | 10% | Low to Moderate |
Units of REITs and InvITs | 0% | 10% | Very High |
Are there similar mutual funds in the market?
To date, no asset management company (AMC) has launched any such fund in the past.
How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against the Nifty India Consumption Index TRI. The fund reserves the right to change the benchmark for evaluation of the performance of the scheme from time to time, subject to SEBI Regulations and other prevailing guidelines, if any.
Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as under:
- If units redeemed or switched out are up to 10% of the units purchased or switched in within one year from the date of allotment – Nil.
- If units redeemed or switched out are over and above the limit within one year from the date of allotment – 1%.
- If units are redeemed or switched out on or after one year from the date of allotment – Nil.
The exit loads set forth above are subject to change at the discretion of the AMC and such changes shall be implemented prospectively.
Who will manage this scheme?
GB Gautam Bhupal and Sonal Gupta are the designated fund managers of this scheme.
Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
