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Nilanjan Dey

KOLKATA, Nov. 20

RELIANCE Industries has taken the top slot in the India-dedicated fund managed by HSBC. In end-October, Reliance had occupied the third spot. The fund has relegated MphasiS BFL to the No 3 position, while Satyam Computer stays untouched in the second place.

HGIF Indian Equity, rated AA by Standard & Poor's, has made these changes in the last few weeks as part of its overall strategy of what Mr Sanjiv Duggal, Fund Manager, calls "blend investing". HSBC is neither an entirely value nor entirely growth investor; it changes style according to market conditions.

Among its other but not-so-recent changes is an increased involvement in the IT segment, which had a weightage of 25.72 per cent on October 31 — the highest exposure. This was followed by non-cyclical consumer goods and basic industries, each accounting for around 17.5 per cent. The fund has also dabbled more in the auto sector.

The basic principles behind the India fund will hold true for HSBC Mutual Fund's domestic equity scheme as well, Mr Duggal (who has been named Chief Investment Officer at the MF) said. "We plan to take the right sector and stock calls here as well," he told Business Line, adding that whole idea was to provide local investors with a diversified vehicle for capital appreciation.

As on October 31, the top assets in the India fund's portfolio were MphasiS BFL (the No 1 holding, accounting for 8.89 per cent of the portfolio), Satyam, Reliance, HPCL, Infosys and Tata Engineering in descending order.

The fund, launched in early 1996, had maintained overweight positions in oil & gas and pharma stocks during the past month. It was underweight in banking. The outlook was determined by strong domestic demand (despite insufficient rainfall) and good corporate profitability. The fund manager had proposed to remain overweight in software, pharma and PSU stocks. The latter, incidentally, have been billed as "privatisation stocks" in HSBC's parlance.

"We have a fully invested portfolio with a very limited cash component, less than five per cent," Mr Duggal said, adding that the fund used the top-down analysis from HSBC's global investment strategy group. He was in Kolkata to meet distributors and wholesale investors.

According to Mr Sanjay Prakash, Chief Operating Officer at HSBC MF, the domestic equity scheme (which has been launched with three other schemes on the debt side) may be viewed as a test of sorts, especially in a situation marked by a general indifference towards the stock market.

"Granted, not everybody likes equities at this point. But just in case the broad market moves up, no one will like to fall behind either. However, an entry at a future date may prove to be a more expensive proposition, particularly if NAVs go up," he said.

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