Financial Daily from THE HINDU group of publications
Sunday, Dec 01, 2002
Financial Daily from THE HINDU group of publications Sunday, Dec 01, 2002 |
|
|
|
|
|
Investment World
-
Public Offers Markets - Mutual Funds Industry & Economy - Investments HSBC Equity Fund: Unattractive Aarati Krishnan
HSBC Equity Fund is a plain vanilla product — an open end, diversified equity fund which plans to invest with a focus on large and mid-sized companies. The fund is charging an initial entry load of 2 per cent, which will be appropriated towards initial issue expenses. The fund will be managed by Mr Sanjiv Duggal, who has been a fund manager with HSBC's offshore India-dedicated fund — India Equity Fund — for eight years. The track record of the India Equity Fund over the past four years suggests an aggressive orientation. While it substantially outperformed the S&P CNX Nifty in 1999 , it trailed the Nifty by a wide margin in the bear markets of 2000 and 2001. In the first nine months of 2002, the fund once again outpaced the Nifty with positive returns of around 16 per cent, while the Nifty remained unchanged. Over the entire four-year period, the fund managed to substantially outperform the Nifty. However, notwithstanding the track record of India Equity Fund, investors can avoid investing in HSBC Equity Fund during its initial public offering (IPO) and can instead wait for the fund to accumulate a reasonable performance track record before opting for it. It is difficult to say if the HSBC Equity Fund will adopt the same fund management style as the offshore fund. For Indian investors looking to build an equity portfolio, there are quite a few open-end equity funds already in operation, which have a proven performance track record across different market cycles over a five-year period. In the case of existing funds, it is also possible to form a reasonable opinion about the investment management style and the stock selection ability of the fund manager, while this comfort is not available with a new fund. Investors can, thus, stay away for now.
Send this article to Friends by
E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|