hsbc large and mid cap equity fund deck · s&p bse sensex –tri performance ... rbi repo rates...

Power meets great potential

HSBC Large and Mid Cap Equity Fund Deck(Large & Mid Cap Fund: An open ended equity scheme investing in both large cap and mid cap stocks)

July 2020

1

Summary

1. Why Equities ( slide no 2 to 6)

2. Benefits of combining Largecaps and Midcaps ( slide no 7 to 10 )

3. Large and Midcap Fund category - power meets potential with discipline ( slide no:11 to 13)

4. HSBC Large and Midcap Equity Fund (HLMEF)

1. Why HLMEF( slide no: 14-17)

2. Investment strategy ( slide no: 18-19)

3. Current portfolio and investment theme ( slide no: 20-24)

5. Who should invest ( slide no :25)

6. Key features ( slide no : 26)

2

Sharp equity market declines have been followed by recovery

Source: BSE, ACE MF, S&P BSE Sensex TRI data as at June 2020

For illustration purposes only. Past performance may or may not sustain, past performance does not guarantee the future performance.

Equity^ market performance across big events

Event led sharp equity market declines have been followed by significant rebounds and recovery over a long

term

3

Where are we today?

Reasonable equity valuations + low interest rates

Source: Bloomberg, MOSL, Data as at June 2020,

Past performance may or may not sustain and doesn’t guarantee the future performance

Valuations – Market cap to GDP %

52

82 83

103

55

95

88

7164 66

81

69

7983 79

56

71

FY0

5

FY0

6

FY0

7

FY0

8

FY0

9

FY1

0

FY1

1

FY1

2

FY1

3

FY1

4

FY1

5

FY1

6

FY1

7

FY1

8

FY1

9

FY2

0

FY2

1E

Average of 75% for the period

3.25%3.35%

1271

5869

2577

5993

8660

10302

0

2000

4000

6000

8000

10000

12000

14000

0.001.002.003.004.005.006.007.008.009.00

10.00

Jun

-02

Fe

b-0

3

Oct-

03

Jun

-04

Fe

b-0

5

Oct-

05

Jun

-06

Fe

b-0

7

Oct-

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b-0

9

Oct-

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b-1

1

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Jun

-12

Fe

b-1

3

Oct-

13

Jun

-14

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b-1

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Oct-

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Jun

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Fe

b-1

7

Oct-

17

Jun

-18

Fe

b-1

9

Oct-

19

Jun

-20

RBI Repo rates vs Equity market (Nifty 50)

RBI Repo Rate (LHS) RBI Reverse Repo Rate (LHS) Nifty 50 (RHS)

4.5%4.4%~4.6x

Repo/Reverse repo @ multiyear lows~2.3xRepo

Reverse

Repo

Reverse Repo

Repo

Low equity valuations and multiyear low interest rates

offer an ideal scenario for equity investments

4

India’s equity market moves with earnings

Source: Ace MF, MOSL, Bloomberg, Data as at June 2020, E – Estimates, Nifty 50 TRI index as of 31 March for respective financial years.

Past performance is not indicative of future performance, past performance may or may not be sustained in the future

FY01 to FY20, Nifty EPS growth is 10.3% CAGR, while Nifty TRI delivered ~12.1% CAGR returns

73 7892

131

169184

236

281251 247

315

348369

406 415397

426454

483 472

454

637

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

FY

01

FY

02

FY

03

FY

04

FY

05

FY

06

FY

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FY

09

FY

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FY

11

FY

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18

FY

19

FY

20E

FY

21E

FY

22E

0

100

200

300

400

500

600

700

Nifty EPS (INR)

5

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Nifty 100 TRI

Nifty Midcap 150 Index TRI

Debt

Gold

Despite volatility, equities one of the best performing asset classes

over a long term, if one holds through market correction phases

Equities delivered 2.8X returns compared to Debt and 1.3X compared to Gold

• Equities have consistently delivered above average returns in the long-term over other asset classes such as

debt and gold

• Equities are inherently volatile in the short run, patience is the key to build wealth from equities over a long term

Mutual fund investments are subject to market risks, read all scheme-related documents carefully. Past performance may or may not sustain and doesn’t guarantee the future performance

Growth of Rs. 100,000 since 2005

Source: NSE, LBMA, CRISIL, Returns till calendar year end, Data as at December 2019

The above chart is provided for illustration purpose only

Equity, debt and gold represented by Nifty 100 TRI, CRISIL 10 Year Gilt Index and LBMA prices converted into the rupee respectively.

Nifty Mid Cap 150 index performance is also added here for reference

Chart highlights growth of Rs 100,000 in each asset class over 15 years until bull market

639918

703511

520802

242971

6

Useful reminder: ‘power of compounding’

The above chart is provided for illustration purpose only

Source: BSE, CRISIL, Equity represented by S&P BSE Sensex, CY Data until calendar year end, Data as at December 2019

* Average of daily rolling CAGR for 5-year holding period of S&P BSE Sensex since CY Jan 1980 - Dec 2019

• Equity has returned average ~16% CAGR* on 5 year rolling basis in the past 40 years

Investment in equity has delivered ~2X multiplier effect every 5 years

1.0 2.1 4.4 9.319.5

40.9

85.8

180.3

378.7

0 5 10 15 20 25 30 35 40

Investment horizon

Potential growth for investment of Rs.100,000


7

Why Large Caps? – consistency is the key

For illustration purpose only.

Source: NSE, CRISIL, CY data as at December 2019

Large Cap index is represented by Nifty 100 TRI, Return distribution based on a daily rolling returns of various holding periods. Period considered: CY January 2005 – December 2019

Large Caps offer lower probability of delivering negative returns within equities


Lower volatility

Stable earnings growth

Well researched

Well-owned

Reasonable valuations

Large Cap features

4%0% 0% 0%

35% 33%

25%

18%

49%

59%

75%

82%

12%7%

0% 0%

3 years 5 years 7 years 10 years

Returns distribution of large caps

Less than 0% 0% to 10% 10% to 20% More than 20%

8

Why Mid Caps? – long term growth

For illustration purpose only.


Mid Cap index represented by Nifty Midcap 150 TRI, Return distribution based on a daily rolling returns of various holding periods. Period considered: CY January 2005 – December 2019

Mid Caps offer more probability of delivering high growth


Above average performance

Earnings acceleration

Under-researched

Under- owned

Diversity and alpha

Mid Cap features

12%

2% 0% 0%

24%27% 26%

1%

29%

37%

65%

90%

35% 34%

9% 10%


Returns distribution of Mid Caps

Less than 0% 0% to 10% 10% to 20% More than 20%

9

Source: AMBIT Capital, Bloomberg, data as at June 2020

The above chart and names of the stock / companies are provided for illustration purpose only and represents historical data without having any regards to their future performance.

Source - Ambit Capital Research, The study has gathered a list of Mid Cap stocks which have entered Nifty. It has given a market cap journey of Mid Cap stocks for 5 years before the inclusion in

Nifty index. t-0 represents the year in which the stock has been included in Nifty. t-1 is 1 year before the inclusion in Nifty. Similarly going down to t-5 indicates the market cap of Mid Cap stock 5

years before the inclusion in Nifty. The study has taken an average market cap of all such stocks for these 5 periods which is shown in the chart below. Past performance may or may not sustain

and doesn’t guarantee the future performance. Further, it does not constitute investment research, investment advice or a recommendation to any reader of this content to buy or sell investments.

Mid Caps progress in size before Nifty inclusion

Large caps of tomorrow

– Historically, Nifty’s constituents change by 50% every decade

– Midcaps of today may graduate to become the large caps of tomorrow thereby, replacing the current Nifty

constituents

– Midcaps are an ideal way to gain exposure to some of the rapidly growing industries and business

Over the last 3 years some of the mid cap stocks have become Large caps and entered Large cap indices

But 5 years prior to their inclusion, they were small or mid caps, much smaller in size and much less discussed!

Early exposure to Mid Caps provides access to rapidly growing businesses


e.g. Bajaj Finance – market cap grew by ~22X in 5 years before the inclusion in Nifty

~Rs.94 bn

Aug 2017~Rs.60 bn~Rs.11 bn

~Rs.4 bn

Aug 2012

Rs. 133 bn161

273

Rs. 394 bn

-

50

100

150

200

250

300

350

400

450

t-5 t-3 t-1 t-0

Av

era

ge M

cap

(R

s b

n)

Average progress of a midcap stocks market cap journey before Nifty50 inclusion (Rs bn)

(5 years before Nifty inclusion) (Nifty inclusion year)

10

0

200

400

600

800

1000

Au

g-1

0

Fe

b-1

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Au

g-1

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Au

g-1

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b-1

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Au

g-1

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Au

g-1

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g-1

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g-1

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b-1

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g-1

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Au

g-1

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b-2

0

Aurobindo Pharma

0

1000

2000

3000

4000

5000

6000Jan

-15

Jun

-15

Nov-1

5

Ap

r-16

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p-1

6

Fe

b-1

7

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Dec-1

7

Ma

y-1

8

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Ma

r-1

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Au

g-1

9

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-20

Jun

-20

Bajaj Finance

0

20000

40000

60000

80000

100000

Jun

-11

Dec-1

1

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Dec-1

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-13

Dec-1

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Jun

-14

Dec-1

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Jun

-15

Dec-1

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Jun

-16

Dec-1

6

Jun

-17

Dec-1

7

Jun

-18

Dec-1

8

Jun

-19

Dec-1

9

Jun

-20

MRF

0

5000

10000

15000

20000

25000

30000

35000

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

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Dec-1

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Jun

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Dec-1

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Jun

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Dec-1

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Jun

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Dec-1

9

Jun

-20

Eicher Motors

Today’s Mid Caps can add alpha to your portfolio

Yesterday’s Mid Caps are today’s Large Caps

Stock growth

of 8.1X

since Jan ‘15

The stock named above is for illustration purposes only and does not constitute investment research, investment advice or a recommendation to any reader of this content to buy or sell investment product.

Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies that may have been discussed in this report and

should understand that the views regarding future prospects may or may not be realised.

Currently in the portfolio, does not guarantee the position in the future. (Please refer latest portfolio for the reference)

Past performance may or may not be sustained in the future, Past performance is not indicative of future performance.

The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis returns indicated above. Data as at June 2020

Stock growth

of 13.6X

Since Jun ‘11

Stock growth

of 8X

Since Aug ‘10

Stock growth

of 9.1X

Since Jan ‘11

Mutual fund investments are subject to market risks, read all scheme-related documents carefully.

• Many Mid Caps have now become Large Caps and few such stocks have also been a part of HSBC Mutual

Fund’s portfolio across equity funds

11

When power meets great potential

Large Caps complement Mid Caps and provide strength to a growth portfolio

Volatility of equities

can be kept under

check with stability

of Large Caps

Mid Caps can

provide necessary

high growth potential

engine to a portfolio

Right mix of Large

Caps & Mid Caps can

deliver higher growth

with lesser volatility

Power of Large Caps Potential of Mid CapsPower meets

great potential


12

Large & Mid Cap index offer relatively lower volatility

• Stability of Large Caps mitigate volatile nature of Mid Caps in Large and Mid Cap Index (LMC)


For illustration purpose only

Risk and Returns based on rolling returns of various holding periods. Period considered: CY January 2005 – December 2019

Large and Mid Cap Index (LMC) represented by Nifty LargeMidcap 250 Index TRI, Large Cap index is represented by Nifty 100 TRI, Mid Cap Index is represented by Nifty Midcap 150 TRI

Volatility represented by annualised standard deviation based on daily returns

Consistent growth of Large Caps and Mid Caps offer better risk adjusted performance


12.0% 12.2% 11.8% 12.1%12.9% 13.4% 12.8% 13.3%14.0% 14.8% 13.9% 14.6%

8.9%

5.9%

3.6%

2.7%

11.3%

7.1%

4.8%

2.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%


Performance and Volatility - Large and Mid Cap Index

Nifty 100 TRI Average Returns Nifty LargeMidcap 250 Index TRI Nifty Midcap 150 Index TRI

Nifty 100 TRI Volatility (RHS) Nifty LargeMidcap 250 Index TRI Volatility (RHS) Nifty Midcap 150 Index TRI Volatility (RHS)

ad

dit

ion

al ri

sk in

mid

cap

s

ad

dit

ion

al ri

sk

inm

id c

ap

s

ad

dit

ion

al ri

sk

inm

id c

ap

s

13

Exposure in Mid Cap differentiates LMCFs vs MCFs

Source: Ace MF, Data as at June 2020, Large & Mid Cap Fund category schemes and Multi Cap Fund category schemes data is considered here

• Multi Cap funds (MCFs) category average exposure to Mid Caps is on lower side at ~15.6% on an average,

while Large and Mid Cap Funds (LMCFs) category average exposure to Mid Caps is on higher side at ~37%

Minimum exposure of 35% to Mid Caps can provide growth advantage over a long term


54

54

53

53

49

49 52

52

52

53

37

37

37

37

39

39 36

37

36

36

0

10

20

30

40

50

60

70

80

90

100

Se

p-1

9

Oct-

19

Nov-1

9

Dec-1

9

Jan

-20

Fe

b-2

0

Ma

r-2

0

Ap

r-20

Ma

y-2

0

Jun

-20

LMCF - category average - Mcap weight%

Largecap Midcap

70

70

71

70

67

66 68

67

67

67

15

15 15

16

17

18 17

17

17

15

0

10

20

30

40

50

60

70

80

90

100

Se

p-1

9

Oct-

19

Nov-1

9

Dec-1

9

Jan

-20

Fe

b-2

0

Ma

r-2

0

Ap

r-20

Ma

y-2

0

Jun

-20

Multicap - category average - Mcap weight%

Largecap MidcapMidcap avg. Midcap avg.

14

HSBC Large and Mid Cap Equity Fund(Large & Mid Cap Fund: An open ended equity scheme investing in both large cap and mid cap stocks)

15

Why invest in HSBC Large and Mid Cap Equity Fund (HLMEF)?

Power of consistency and stability

HLMEF offers consistency with an exposure to Large Cap stocks which are known to be stable

compounders

Potential of high growth

HLMEF’s allocation to Mid Cap stocks offers potential of above average growth

Power meets great potential

The fund offers power of consistent Large Caps and potential of growing Mid Caps with an optimal

allocation through the proprietary PBRoE investment tool of HSBC Global Asset Management

Benefit from discipline

Minimum 35% allocation in each (Large Cap and Mid Cap) helps in instilling discipline and gain from it

Subject to relatively lower volatility

Less volatile Large Caps can restrict funds downside and encourage investors to remain invested for

longer timeframe

Gain from the mix of power of Large Caps and growth potential of Mid Caps with HLMEF


16

HSBC Large and Midcap Equity Fund – primary thought process

Our thought process is as follows

• The key theme of the portfolio has been to be with sector leaders across market capitalisation and as they

would gain from market share and profit pool consolidation. Thus all companies will be dominant players in

their respective sectors.

• We would be looking to be in large caps where scale will be an advantage (like in banks/financials) while for

midcaps the focus will be on sector leaders or niche players in their respective businesses.

• In sectors like retail, consumer durables, specialty chemicals etc. there are sector leaders and niche players

from midcap and smallcap. These sectors may not be represented by largecap names. However, they provide

tremendous market opportunity and can exhibit sustainable profit growth.

• In certain other cases like that of healthcare, we have mix of large and midcaps as there are players in hospitals

or diagnostics which are midcap.

• Also in some cases like financials which is dominated through select large Private Banks, we can look to have

niche regional players (regional banks with strong liability franchise and capital adequacy) and select NBFCs

with strong parentage. This is more from a bottom up perspective.

• We would be focusing on dominant players in their respective sectors, exhibiting sustainable profitability and are

available at reasonable valuations.

17

• Type of scheme - Large & Mid Cap Fund - An open ended equity

scheme investing in both large cap and mid cap stocks.

• Large and Mid Cap focus - As the name suggests, the scheme

aims to focus on Large Cap and Mid Cap stocks.

• Minimum investment - The fund will hold a minimum 35% of the

corpus in Large Cap companies, while another 35% will be

deployed in Mid Cap companies. There is a provision which allows

HLMEF to invest 0% to 30% in other than Large and Mid Cap

companies and 0% to 20% in Debt & Money Market instruments

(including Cash & Cash equivalents)

• Benchmark - NIFTY LargeMidcap 250 TRI

A solution to generate better risk adjusted performance

The investment list above is not exhaustive and for illustration purpose only.

35%-

65%

35%-

65%

Minimum and

maximum

investment in equity

& equity related

instruments of Large

Cap stocks between

35% to 65% of total

assets

Minimum and

maximum

investment in equity

& equity related

instruments of Mid

Cap stocks

between 35% to

65% of total assets

HLMEF’s focus on Large and Mid Caps offer dual advantage of Consistency and Growth

HSBC Large and Mid Cap Equity Fund (HLMEF)


18

HSBC Large and Mid Cap Equity Fund (HLMEF’s) investment approach

Optimal market cap allocation – exposure to two market cap classes – Large and Mid Caps

to strike the right balance between Stability and Growth

Blended strategy - A top down and bottom up approach will be used to invest in equities. Sector

agnostic style of investments with a strategy to build an actively managed diversified portfolio of

Large and Mid Cap stocks having great potential using PBROE valuation framework

Investment style - HSBC Large and Mid Cap Fund aims to offer a potential quality mix of Large

Caps and Mid Caps (35% to 65% each) with a provision to invest 0% to 30% in to other than Large

Cap and Mid Cap companies. The fund has a provision to invest across value, growth and market

capitalisations.

HLMEF aims for optimal market cap allocation within Large and Mid Caps


19

How do we construct a portfolio?

Inflated Buy Growth Buy

Value BuyAttractive

Buy

RoE of stocks

PB

of

sto

cks

Underweight / Overweight position of market cap segments

PBRoE: PB – Price to book (Valuations) vs RoE - profitability

For illustrative purposes only


Placement of stocks through proprietary PBRoE process makes it more efficient

20

Data as on 30 June 2020

HSBC Large and Midcap Equity Fund (HLMEF)Fund Portfolio

21Data as at June 2020


Current investment theme

Economic impact of COVID-19 can be classified into lockdown phase and the post lockdown phase.

In the post lockdown phase, the markets have begun to look forward to resumption in supply as well as

recovery in demand.

At the moment, the focus of the market is on companies which would revive quickly while once the pandemic

is over and the economy returns to normalcy then the focus would be on companies that would thrive.

Disruptions have created long term investment themes. Each set of crises have seen new trends emerging

from the scene.

COVID-19 being an unprecedented, we believe that there would be an emergence of a new normal with

impact felt across industries (though the impact will not be uniform).

Even before this disruption, the most prominent theme that drove our portfolio construction view was that of

profit pool migration towards market share gainers. Due to the COVID-19 disruption, this process of profit

pool migration towards dominant players will accelerate.

This is leading to big companies becoming bigger and stronger. This theme was / is visibly across many

sectors – notably among Financials, Telecom, Real Estate, Airlines etc.

The above trend would be there in most sectors but it would become more visible in more disrupted sectors

like Travel, Entertainment, Hospitality, Construction etc.

From a medium to long term perspective, the current phase of disruption shall also pave way for accelerated

digital adoption by consumers as well as enterprises.

We see telecom, internet economy, ecommerce, technology vendors etc to benefit from this disruption.

Another long term theme is that of diversification of the global supply chain due to ‘China + 1’ strategy which

could be adopted by corporates as well as economies and India could stand to benefit out of that.

Disruptions have created long term investment themes



Current investment theme

In the short term, we are more positive on sectors that can exhibit revenue and earnings resilience as the

impact of the Pandemic and the resultant lockdown in the economy is not uniform across sectors.

We believe that in the near term, growth will be scarce and the balance sheet strength of the companies will be

challenged in a year like the current one. So a company that is displaying growth in earnings and having

balance sheet strength will command a premium and market would be willing to pay.

We believe that the revenue and earnings resilience is most likely to be demonstrated by segments that are in

the business of providing basic and essential products/services. (Example: Healthcare and Telecom). We have

a positive view of these sectors.

We are also moderately positive on companies/sectors that can demonstrate faster recovery in case of an

economic rebound. This would be demonstrated by sectors where there would pent up demand post the

disruption phase. So, as and when the normalcy returns, so would the sales for those companies / sectors. We

are using the correction to reorient the exposure within the Consumer Discretionary space which would be a

beneficiary of this pent-up demand. We are more positive on Consumer Goods as against Consumer Services

part of the discretionary basket at this juncture.

We are also positive on the beneficiaries of the global supply chain diversification, away from China to India.

(e.g. Specialty Chemicals).

We are also moderately positive on companies which would be beneficiaries of a benign crude oil price

environment. These would be sectors where their raw material prices are linked to crude price ( like paints,

PVC pipes).

Currently, we believe that private sector capex as well as government capex will get delayed and we hold

negative view on the sectors dependent on capex. We also have negative view on labour intensive sectors

such as construction, travel, hospitality etc.

In the short term we are more positive on companies that exhibit earnings resilience


Current portfolio positioning

HSBC Large & Mid Cap Equity Fund (HLMEF) positioning

Sector allocation:

– The fund is overweight in Healthcare, Telecommunication and Consumer Discretionary sectors.

– The fund is underweight in Industrials, Energy, Materials and Utilities sectors.

– The fund has a neutral position in Consumer staples, Financials, Technology, Real estate sectors.

Market Capitalisation Mix:

Currently the allocation to large/mid/small caps are at 59.6%/37.0%/0.6% compared to

59.7%/37.5%/nil in the previous month.


HLMEF is overweight in Healthcare, Telecom and Consumer Discretionary sectors

24

Current key focused sectors in HLMEF

Data as at June 2020, OW – Overweight, EW – Equal Weight

Sectors Comments

Healthcare

We are overweight on account of the expected resilience in earnings and also ability to retain the demand in the

current environment compared to other sectors. Recent approval of facilities by the US FDA will improve the

prospects of US business of investee companies. We also believe that the focus of buyers in the US will also be to

ensure steady supply of generic drugs, whereas in the past, price reduction was the only focus. This should ease

pricing pressure for Indian companies as well as give them higher visibility of demand. Domestic business will see a

modest growth as chronic segment will be stable but acute segment will show a decline. Stabilization of raw material

supplies from China has eased pressure on raw material sourcing. We have increase our exposure to the sector,

primarily through companies having US generic business as well as domestic business. Our exposure to pathology

labs is under anticipation that their demand would recover once lockdown is lifted as their services are largely non-

discretionary.

Telecom

Services

Telecom is one sector that will see very limited impact of the lock-down in the country owing to the essential nature

of the service. Looking beyond this crisis period, the telecom sector continues to be a beneficiary of consolidation

and tariff improvement. We see profitability of the sector coming back strongly and the post consolidation phase

would benefit players who are better positioned on network / spectrum and also with better access and ability to

deploy future capital. Our preference is for players with relatively stronger balance sheet and showing better

execution on the ground.

Consumer

discretionary

The fund is overweight in sectors which can benefit from pent up demand, especially consumer goods (like

durables, jewellery, kitchen appliances, passenger vehicles etc.). Our exposure is through market leaders which

should also benefit from market share gains. We also have exposure to tyre industry in the auto sector, which will

also benefit from replacement demand.

25

Who should invest in HSBC Large and Mid Cap Equity Fund (HLMEF)?

Source – HSBC MF, Note - Above list of categories in the chart is an indicative list and is not exhaustive #Typical minimum investment horizon for investors, *There were 2 instances on July 16, 2013 and July 24, 2013 when the liquid funds gave negative one-day return due to tightening of liquidity by RBI1 An open ended debt scheme investing in instruments with Macaulay duration between 4 to 7 years 2 An open ended debt scheme investing in government securities across maturity3 An open ended short term debt scheme investing in instruments with Macaulay duration between 1 year and 3 years

RE

TU

RN

Liquid Funds #

Short Duration Funds 3

Gilt Funds 2

RISK

Long Duration Funds 1

Equity Hybrid Funds

Dynamic Bond Funds

HSBC Large and Mid cap Equity Fund

Large Cap Funds

Mid / Small Cap Funds

HSBC Large and Mid Cap Equity fund is placed below Mid, Small Cap and Thematic funds

Thematic Funds


Aggressive investors

HLMEF is well suited for aggressive investors.

It provides above average return potential with

relatively less volatility

Moderately Aggressive investors

The fund is well suited for an informed investor

who is looking for adequate exposure to

equities at lesser risk

Disciplined equity investors

HLMEF is best suited for investors looking for

an optimal market cap allocation

26

Fund Name HSBC Large and Mid Cap Equity Fund

Benchmark NIFTY LargeMidcap 250 TRI

Minimum

Application

Amount

Rs 5,000/- per application

Minimum

Application

Amount

(SIP)

Minimum Investment Amount - Rs. 500 (monthly)

TypeLarge and Mid Cap - An open ended equity scheme

investing in both large cap and mid cap stocks

Plans /

Options /

Sub options

Regular, Direct plans / Growth, Dividend / Payout,

Dividend Reinvestment

Loads

(including

SIP / STP

wherever

applicable)

Entry Load* : Nil

Exit Load:– Any redemption / switch-out within 1

year from the date of allotment: 1%

No Exit Load will be charged, if units are

redeemed/switched-out after 1 year from the date of

allotment. ^

SIP/STP/SWP AvailableFund

ManagersNeelotpal Sahai and Amaresh Mishra

^The exit loads set forth above is subject to change at the discretion of the AMC and such

changes shall be implemented prospectively

*In terms of SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry

load will be charged by the Scheme to the investor effective August 1, 2009. No exit load (if any)

will be charged for units allotted under bonus / dividend reinvestment option.

HSBC Large and Mid Cap Equity Fund (HLMEF)

Investment Objective - To seek long term capital growth through investments in both large cap and mid

cap stocks. However, there is no assurance that the investment objective of the Scheme will be

achieved.

27

Disclaimer

This document provides a high level overview of the recent economic environment. It is for marketing purposes and does not constitute investment research, investment

advice or a recommendation to any reader of this content to buy or sell investments. It has not been prepared in accordance with legal requirements designed to promote

the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This document has been prepared by HSBC Asset Management (India) Private Limited (HSBC) for information purposes only and should not be construed as an offer or

solicitation of an offer for purchase of any of the funds of HSBC Mutual Fund. All information contained in this document (including that sourced from third parties), is

obtained from sources HSBC, the third party believes to be reliable but which it has not independently verified and HSBC, the third party makes no guarantee,

representation or warranty and accepts no responsibility or liability as to the accuracy or completeness of such information. The information and opinions contained within

the document are based upon publicly available information and rates of taxation applicable at the time of publication, which are subject to change from time to time.

Expressions of opinion are those of HSBC only and are subject to change without notice. It does not have regard to specific investment objectives, financial situation and

the particular needs of any specific person who may receive this document. Investors should seek financial advice regarding the appropriateness of investing in any

securities or investment strategies that may have been discussed or recommended in this report and should understand that the views regarding future prospects may or

may not be realized. Neither this document nor the units of HSBC Mutual Fund have been registered in any jurisdiction. The distribution of this document in certain

jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to

observe, any such restrictions.

© Copyright. HSBC Asset Management (India) Private Limited 2020, ALL RIGHTS RESERVED.

HSBC Asset Management (India) Private Limited, 16, V.N. Road, Fort, Mumbai-400001

Email: [email protected]

Mutual fund investments are subject to market risks, read all scheme-related documents carefully.

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