schemewise annual reports 2015 - 2016 · hsbc capital protection oriented fund series ii plan i ......

HSBC CASH FUND 8

Schemewise Annual Reports2015 - 2016

► INDEX

HSBC Equity FundHSBC India Opportunities FundHSBC Dividend Yield Equity FundHSBC Dynamic FundHSBC Tax Saver Equity FundHSBC Infrastructure Equity FundHSBC Midcap Equity FundHSBC Emerging Markets FundHSBC Brazil FundHSBC Asia Pacific (Ex Japan) Dividend Yield Fund HSBC Global Consumer Opportunities FundHSBC Managed SolutionsHSBC Flexi Debt FundHSBC Income FundHSBC Floating Rate FundHSBC Ultra Short Term Bond FundHSBC Cash FundHSBC MIPHSBC Fixed Term Series 91HSBC Fixed Term Series 94HSBC Fixed Term Series 95HSBC Fixed Term Series 96HSBC Fixed Term Series 98HSBC Fixed Term Series 105HSBC Fixed Term Series 107HSBC Fixed Term Series 109HSBC Fixed Term Series 125HSBC Capital Protection Oriented Fund Series II Plan IHSBC Capital Protection Oriented Fund Series II Plan IIHSBC Fixed Term Series 102HSBC Fixed Term Series 106HSBC Capital Protection Oriented Fund Series I Plan IHSBC Gilt FundSummary of votes cast during the Financial year 2015-16Details of votes cast during the Financial year 2015-16Certificate on votes cast during the Financial year 2015-16Annexure I

► INDEX

HSBC Equity Fund

HSBC India Opportunities Fund

HSBC Dividend Yield Equity Fund

HSBC Dynamic Fund

HSBC Tax Saver Equity Fund

4

1 HSBC Equity Fund

Trustees’ ReportFor the year ended March 31, 2016

The Trustees of HSBC Mutual Fund (“Fund”) present the fourteenth Annual Report and the audited abridged fi nancial statements of the schemes of the Fund for the year ended March 31, 2016.

1. SCHEME PERFORMANCE, FUTURE OUTLOOK AND OPERATIONS OF THE SCHEMES

a) Operations and Performance of the Schemes

HSBC Equity Fund (HEF) - an open-ended diversifi ed Equity SchemeHEF seeks to generate long-term capital growth from an actively managed portfolio of equity and equity related securities.

The net assets of HEF amounted to Rs. 567.22 crores as at March 31, 2016 as against Rs. 660.85 crores as at March 31, 2015. Around 97.98% of the net assets were invested in equities, 2.06% of the net assets were invested in reverse repos/CBLO and (-0.04%) in net current assets as at March 31, 2016.

HEF remained invested in a diversifi ed portfolio across large capitalization stocks. It has outperformed its benchmark over the FY 2015-16 due to superior stock selection. Selections in sectors like Financials, Healthcare and Industrials contributed to the outperformance during this period. Given that HEF is a true large cap fund, we believe that Nifty 50 is a more aligned and representative index for the scheme. Hence, we are considering to change the scheme benchmark to Nifty 50 which in turn will provide more appropriate performance comparison to investors.

Date of Inception : 10 December 2002 Absolute Returns (%) Compounded Annualized Returns (%)

Scheme Name & Benchmarks April 15 - March 16

April 14 - March 15

April 13 - March 14

Since Inception

HEF - Growth -6.34 27.89 16.82 22.00

S&P BSE 200 (Scheme Benchmark) -7.86 31.72 16.65 17.40

Nifty 50 (Standard Benchmark) -8.86 26.33 17.53 16.07

Rs. 10,000, if invested in HEF, would have become 9,366 12,789 11,682 142,040

Rs. 10,000, if invested in S&P BSE 200, would have become 9,214 13,172 11,665 85,036

Rs. 10,000, if invested in Nifty 50, would have become 9,114 12,633 11,753 73,047

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. Data for the period April to March has been considered in all cases, except for Since Inception. ‘Since Inception’ returns are calculated on Rs. 10 invested at inception. Standard benchmark is prescribed by SEBI and is used for comparison purposes. Returns on Rs. 10,000 are point-to-point returns for the specifi c time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be a minor difference between point-to-point returns vis-à-vis returns indicated above. Calculations are based on Growth NAVs.

b) Market Overview & Outlook(as furnished by HSBC Asset Management (India) Private Limited)

EQUITY OUTLOOKAfter a strong performance in the preceding fi nancial year, the fi nancial year 2015 - 2016 saw equity markets shedding part of these gains, tracking some of the global cues. From a domestic market perspective, there were headwinds in the form of second consecutive year of below normal monsoons, stagnation in the private investment cycle and impact of the clean-up of the banking system. This resulted in weak earnings momentum throughout the fi nancial year leading to downgrades. The tepid corporate performance coupled with the slow pace of crucial legislative reforms during the year disappointed market participants. The midcap index managed to outperform the large cap indices and recorded a marginal gain during the fi nancial year. On the fl ows side, the FII net fl ows moved into the negative territory (-USD 1.51 bn) as against strong net

5

HSBC Equity Fund 1

Trustees’ ReportFor the year ended March 31, 2016 (Contd...)

infl ows of USD 18.08 bn seen in the previous fi scal. The domestic institutional investors however turned strong net buyers led by MFs (USD 12.10 bn of DII net infl ows) during the year as against net outfl ows of USD 3.71 bn seen in the previous fi scal.

Indices Returns (April 1, 2015 to March 31, 2016) 1 Year (%)

S&P BSE Sensex -9.4%

NSE CNX Nifty -8.9%

S&P BSE 100 -9.0%

S&P BSE 200 -7.9%

S&P BSE 500 -7.8%

S&P BSE Midcap 0.3%

Source: Bloomberg

Our view on the key aspects related to equity markets are presented below -

The macro narrative over fi nancial year 2015 -2016 was one of softening infl ation, twin defi cits coming under control, declining interest rates but weak growth. India is one of the very few Emerging Markets to have weathered the currency crisis well and it is now on the path of recovery. The macro adjustment process along with a weaker external environment and lacklustre agriculture / rural growth has meant that recovery of growth during the year was weaker than expected. From a domestic point of view, we have seen improvements in the macro data points over the past 2 years and the budget policy document has laid out a fi scal roadmap reaffi rming government’s focus on the fi scal consolidation front. We continue to believe that India is on a relatively better footing macro-wise vis-à-vis other emerging markets. However, the pace of this macro improvement translating to results on the ground has lagged expectations due to a sluggish pick up in the private capex given the domestic and global over capacities. Growth has faced headwinds from the slower than expected pace of corporate de-leveraging, and unforeseeable external factors, such as two years of bad monsoon and lack of global aggregate demand, delaying the expected economic recovery process in India.

In fi nancial year 2016 -2017, we expect a recovery, driven early by better margins - aided by lower input and interest costs and subsequently a volume recovery. Government led investment spending and urban consumption are likely to lead with private sector investments and rural consumption contributing later. On the policy front, Government has done its fair bit to improve the investment environment but has remained constrained on reforms requiring legislative action, as they lacked numbers in the Upper House of the Parliament. But this scenario is expected to improve going forward, on the back of recent state assembly election adjustments and we may see more policy reform announcements ahead. An above normal monsoon season should help in reviving the rural demand and that rounds up an optimistic year ahead from a domestic perspective.

Key factors to look out for in the short to medium term are the monsoon rainfall trends and the policy roadmap of the Government. Risks to this view are in the form of weak global cues led by ‘Brexit’ related concerns and soft global growth.

DEBT OUTLOOKFixed Income in Financial Year 2015-16 has seen volatility on various counts starting from INR depreciation, lower FII fl ows Fed rate hike fears, global events such as European Central Bank (ECB) rate cuts and china devaluation and supply of power distribution company bonds in large quantum by Government of India.

Infl ation has remained around target levels throughout the year. Infl ation print varied between 3.7% to 5.7% whereas the target for January 2016 was 6%. The lower infl ation numbers can be attributed to lower oil prices and control of food price infl ation through lower Minimum Support Price and supply side management.

RBI took pragmatic view and cut rates gradually by about 150 bps during this period. The last cut of 50 bps (for the fi nancial year) was in Sept. 2015. The rate cuts were not fully passed through in lending rates by similar quantum. The RBI on its part announced implementation of Marginal cost based Lending rate (MCLR) guidelines during the period.

6

1 HSBC Equity Fund


Deposit and credit growth remained subdued throughout the period due to limited liquidity in the system. RBI continued to support stance of negative liquidity throughout the year. This combined with currency outfl ow in the intermittent period created headwinds for deposit growth. Credit growth remained subdued due to lower commodity prices, lower trade activity and slower economic growth in the country. Moreover, due to weaker economic outlook, stalled project pipeline and lower than capacity utilization project borrowing was very low. With government initiatives some road and rail projects started to pick up. However, this did not translate into demand for credit yet.

Currency (INR) depreciated during the period from about Rs. 62.50 to a USD to about Rs. 68.50 in Feb. 2016. Large part of the depreciation was attributable to low and volatile FII fl ows, devaluation of currency by China in the middle of the year and fear of Chines market collapse, which was extended to other emerging markets. Expectation of Fed hike in 2015 also contributed to risk off trade, which led to higher volatility.

Indian government decided to fund part of the distribution company debt through state government debt. The scheme is called UDAY and thus the bonds are also called UDAY bonds. These bonds presented opportunity for banks to convert their lower rated debt into sovereign rated tradable bonds. RBI also allowed these bonds status of HTM (held to maturity), if they are bought in primary markets. This provided respite for the banks holding larger amount of debt. However, huge supply of these bonds is expected put pressure on overall bond yields.

During month of December to February 2016, the supply overhang of UDAY bonds, Fed hike in December, expectation of higher than committed fi scal defi cit put pressure on yield curve, which moved higher by about 20-40 bps in matter of two months. The curve normalized immediately after the budget as the Government stuck to 3.5% fi scal defi cit target.

Market pre-empted most of the rate cuts by RBI and thus on actual instance reactions remained muted. Spreads for corporate bonds remained low as the enthusiasm from FPI for this segment is pretty low.

Prospects of the rate hike in US may create volatility in fi xed income market though the yield differential route and withdrawal of funds from emerging markets by global funds route. Britain exit from Euro may affect the markets again through risk off measures in market leading to withdrawal from emerging market.

In the coming year apart from the global factors, following domestic factors will play a key role in fi xed income markets:

� Liquidity: Liquidity will drive short end rates and eventually drive decisions leading to market interventions and CRR cuts. RBI has focused now on neutral liquidity stance and providing liquidity to system, which will bode well short end rates

� Infl ation: Infl ation numbers will determine future course of action for RBI and remains a critical variable for policy. We expect infl ation to ease in second quarter of FY 2016-2017

� Growth: GDP growth numbers as well as industrial activity will also determine the decision on policy.

� Fiscal Defi cit: Fiscal defi cit and government spending will determine the government borrowing and crowding out in interest rate curve. We expect prudence in government spending and prospect of spending on infrastructure to pick up which will crowd in private investment as well.

� Current Account Defi cit: Current Account Defi cit determines how the pressure on currency works and effective management of forex reserves.

� Currency levels: Level of INR will determine how the central bank reacts to the situation on the global crisis etc.

2. BRIEF BACKGROUND OF SPONSORS, BOARD OF TRUSTEES AND ASSET MANAGEMENT COMPANY

a) Sponsor HSBC Mutual Fund is sponsored by HSBC Securities and Capital Markets (India) Private Limited (HSCI).

The Sponsor is the Settler of the Mutual Fund Trust. The Sponsor has entrusted a sum of Rs. 1,00,000

7

HSBC Equity Fund 1


(Rupees One Lakh only) to the Trustee as the initial contribution towards the corpus of the Mutual Fund.

HSCI offers integrated investment banking services, securities and corporate fi nance & advisory. HSCI is a member of the Bombay Stock Exchange Limited and National Stock Exchange (capital and derivative market segments). HSCI holds 100% of the paid up equity share capital of HSBC Asset Management (India) Private Limited.

b) HSBC Mutual Fund HSBC Mutual Fund (“the Mutual Fund” or “the Fund”) has been constituted as a Trust in accordance with

the provisions of the Indian Trusts Act, 1882 (2 of 1882) vide a Trust Deed dated February 7, 2002 with HSBC Securities and Capital Markets (India) Private Limited, as the Sponsor and the Board of Individual Trustees. The Trustee has entered into an Investment Management Agreement dated February 7, 2002 with HSBC Asset Management (India) Private Limited (AMC) to function as the Investment Manager for all the schemes of the Fund. The Fund was registered with SEBI vide registration number MF/046/02/5 dated May 27, 2002.

The Trust has been formed for the purpose of pooling of capital from the public for collective investment in securities/any other property for the purpose of providing facilities for participation by persons as benefi ciaries in such properties/investments and in the profi ts/income arising therefrom.

c) Board of Trustees (the Trustees) The Board of Trustees is the exclusive owner of the Trust Fund and holds the same in trust for the benefi t

of the unit holders. The Trustees have been discharging their duties and carrying out the responsibilities as provided in the SEBI (Mutual Funds) Regulations, 1996 and the Trust Deed. The Trustees seek to ensure that the Fund and the schemes fl oated there under are managed by the AMC in accordance with the Trust Deed, the said Regulations, directions and guidelines issued by the SEBI, the Stock Exchanges, the Association of Mutual Funds in India and other regulatory agencies.

d) Asset Management Company (the AMC) HSBC Asset Management (India) Private Limited (the Investment Manager or the AMC) is a private limited

company incorporated under the Companies Act, 1956 on December 12, 2001 having its Registered Offi ce at 16, V. N. Road, Fort, Mumbai 400 001. HSBC Asset Management (India) Private Limited has been appointed as the Asset Management Company of HSBC Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated February 7, 2002 and executed between the Trustees and the AMC. SEBI approved the AMC to act as the Investment Manager of the Fund vide its letter No. MFD/BC/163/2002 dated May 27, 2002. The paid-up equity share capital of the AMC is Rs. 61.59 crores. HSBC Securities and Capital Markets (India) Private Limited holds 100% of the paid up equity share capital of the AMC.

3. INVESTMENT OBJECTIVE OF THE SCHEMESThe investment objective of the respective schemes has been provided above under the heading “Scheme Performance, Future Outlook and Operation of the Scheme” (Refer Section 1).

4. SIGNIFICANT ACCOUNTING POLICIESThe accounting policies are in accordance with Securities Exchange Board of India (Mutual Funds) Regulations 1996.

5. UNCLAIMED DIVIDENDS & REDEMPTIONSSummary of number of investors & corresponding amount Scheme-wise as on March 31, 2016

SchemeUnclaimed Dividend Unclaimed Redemption

Amount (Rs.) No. of Investors


HSBC Equity Fund 8,626,167.97 1905 5,886,846.13 206

8

1 HSBC Equity Fund


6. INVESTOR SERVICESThe number of offi cial points of acceptance of transactions is 197 locations. In addition to the offi ces of the Registrar & Transfer agents, the AMC has Investor Service Centres in 8 locations at its own offi ces - namely Mumbai, New Delhi, Kolkata, Bangalure, Pune, Ahmedabad, Hyderabad and Chennai. With a view to enhance customer convenience, the AMC has the facility of priority based servicing to key distributors through the enhancement of the Interactive Voice Reponses. AMC has a single Toll Free number which can be dialed from anywhere in India. The call centre service is being managed by the Registrar and Transfer Agents. The AMC continues to retain the outsourced back offi ce services with HSBC Electronic Data Processing India Private Limited.

On the distribution front, the number of empanelled distributors was 442 as on March 31, 2016. During the year, the AMC initiated tie-ups for online distribution of the Mutual Fund’s schemes with several channel partners taking the total number of such tie-ups to 42.

7. DETAILS OF INVESTOR GRIEVANCE REDRESSALThe details of the redressal of investor complaints received against HSBC Mutual Fund during April 2015- March 2016 are as follows:

Total Number of Folios: 1,71,939 #

Com-plaintCode

Type of complaint$ (a) No. of complaints pending at the

beginning of the year

(b) No. of com-plaints

receivedduring

theyear

Action on (a) and (b)

Resolved Non Actiona-

ble*

Pending

Within 30

days

30 - 60 days

60 - 180 days

Beyond 180 days

0 - 3 months

3 - 6 months

6 - 9 months

9 - 12 months

I A Non receipt of Dividend on Units

1 1 2 0 0 0 0 0 0 0 0

I B Interest on delayed payment of Dividend

0 0 0 0 0 0 0 0 0 0 0

I C Non receipt of Redemption Proceeds

1 9 9 1 0 0 0 0 0 0 0

I D Interest on delayed payment of Redemption

0 0 0 0 0 0 0 0 0 0 0

II A Non receipt of Statement of Account/Unit Certifi cate

0 2 2 0 0 0 0 0 0 0 0

II B Discrepancy in Statement of Account

0 0 0 0 0 0 0 0 0 0 0

II C Data corrections in Investor details**

1 62 62 0 0 0 0 1 0 0 0

II D Non receipt of Annual Report/Abridged Summary

0 0 0 0 0 0 0 0 0 0

III A Wrong switch between Schemes

0 1 1 0 0 0 0 0 0 0 0

III B Unauthorized switch between Schemes

0 0 0 0 0 0 0 0 0 0 0

III C Deviation from Scheme attributes

0 0 0 0 0 0 0 0 0 0 0

III D Wrong or excess charges/load

0 0 0 0 0 0 0 0 0 0 0

9

HSBC Equity Fund 1


Com-plaintCode




receivedduring

theyear



ble*

Pending

Within 30

days

30 - 60 days

60 - 180 days

Beyond 180 days

0 - 3 months

3 - 6 months

6 - 9 months

9 - 12 months

III E Non updation of changes viz. address, PAN, bank details, nomination, etc

0 4 4 0 0 0 0 0 0 0 0

IV Others 0 11 11 0 0 0 0 0 0 0 0

Total 3 90 91 1 0 0 0 1 0 0 0

Note:

# active folios$ including against its authorized persons / distributors / employees etc.** As per AMFI Best Practice Guidelines Circular No.25/2011-12 for Revisions in the Guidelines on

Standardization of Complaints/Grievances Reporting Procedure, If “Others” include a type of complaint which is more than 10% of overall complaints, then such a reason should be provided separately. Hence data corrections in Investor Details is included as a separate category

* Non actionable means the complaint is incomplete / outside the scope of the mutual fund

8. STATUTORY DETAILSa) The Sponsors are not responsible or liable for any loss resulting from the operation of the Schemes of

the Fund beyond initial contribution of Rs. 1 lakh for setting up the Fund.

b) The price and redemption value of the units, and income from them, can go up as well as down with fl uctuations in the market value of its underlying investments.

c) Full Annual Report shall be disclosed on the website at www.assetmanagement.hsbc.com/in and shall be available for inspection at the Head Offi ce of the Mutual Fund. Present and prospective unit holders can obtain copy of the Trust Deed, the full Annual Report of the Scheme(s), the Annual Report of HSBC Asset Management (India) Private Limited and the text of the relevant Scheme(s) at a price.

9. ACKNOWLEDGEMENTSThe Trustees wish to thank the Unit holders of the Schemes for their support throughout the year and also thank the Government of India, the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI) and the Association of Mutual Funds in India (AMFI) for the guidance provided by them. The Trustees also appreciate the service provided by the Registrar and Transfer Agent, Fund Accountant, Custodian, Bankers, Distributors and Brokers. The guidance and services provided by the Auditors and advocates and the ebullience, sincerity and dedication of the employees of HSBC Asset Management (India) Private Limited is also appreciated.

The Trustees look forward to the continued support of everyone.

For and on behalf of the Board of Trustees of HSBC Mutual Fund

Sd/-

N. P. Gidwani

Chairman

MumbaiJuly 18, 2016.

10

1 HSBC Equity Fund

To the Board of Trustees of

HSBC Mutual Fund - HSBC Equity Fund

Report on the Financial StatementsWe have audited the accompanying fi nancial statements of HSBC Equity Fund (the ‘Scheme’), which comprise the Balance Sheet as at 31 March 2016, the related Revenue Account and the Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information, annexed thereto.

Management’s Responsibility for the Financial StatementsThe Board of Trustees to the HSBC Mutual Fund (the ‘Board of Trustees’) and HSBC Asset Management (India) Private Limited (the ‘AMC’), being the investment manager to HSBC Mutual Fund (the ‘Fund’) (collectively referred as ‘Management’), are responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position and fi nancial performance of the Scheme in accordance with the accounting policies and standards specifi ed in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended (the ‘Regulations’) and the accounting standards issued by the Institute of Chartered Accountants of India (the ‘ICAI’), to the extent applicable. This responsibility includes maintenance of adequate accounting records for safeguarding of the assets of the Scheme and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fi nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to preparation and fair presentation of the fi nancial statements, of the Scheme, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Scheme’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, and to the best of our information and according to the explanations given to us, the aforesaid fi nancial statements give the information required by the Regulations in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Scheme as at 31 March 2016;

(ii) in the case of the Revenue Account, of the net surplus for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash fl ows of the Scheme for the year ended on that date.

Independent Auditors’ Report

11

HSBC Equity Fund 1

Independent Auditors’ Report (Contd...)

Other MattersThe fi nancial statements of the Scheme for the year ended 31 March 2015, were audited by another auditor who expressed an unmodifi ed opinion on those statements on 16 July 2015.

Report on other Legal and Regulatory Requirements1 As required by Regulation 55(4) to the Regulations, we report that:

(a) We have obtained all information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit;

(b) The Balance Sheet and Revenue Account have been prepared in accordance with the accounting policies and standards specifi ed in the Ninth Schedule of the Regulations.

2 As required by Clause 5(ii)(2) of the Eleventh Schedule of the Regulations, we report that the Balance Sheet, Revenue Account and Cash Flow Statement are in agreement with the books of account of the Scheme.

For B S R & Co. LLPChartered AccountantsFirm’s Registration No: 101248W/W-100022

Sd/-

Milind RanadePartnerMembership No: 100564

Place : MumbaiDate : July 18, 2016.

4

3 HSBC INDIA OPPORTUNITIES FUND





HSBC India Opportunities Fund (HIOF) - an open-ended fl exi-cap Equity SchemeHIOF seeks to generate long term capital growth through investments across all market capitalizations, including small, mid and large cap stocks. It aims to be predominantly invested in equity and equity related securities. However, it could move a signifi cant portion of its assets towards fi xed income securities if the fund manager becomes negative on equity markets.

The net assets of HIOF amounted to Rs. 464.85 crores as at March 31, 2016 as compared to Rs. 456.15 crores as at March 31, 2015. Around 97.85% of the net assets were invested in equities, 2.41% of the net assets were invested in reverse repos/CBLO and (-0.26%) in net current assets as at March 31, 2016.

HIOF outperformed its benchmark over the FY 2015-16 due to superior stock selection. Selections in sectors like Healthcare, Financials, and Industrials also contributed to the outperformance during this period. HIOF is a true multi cap fund with large cap bias. Hence, we are considering changing the scheme benchmark to S&P BSE 200 as we believe it’s a more appropriate representative index and will provide investors with more apt performance comparisons.

Date of Inception : 24 February 2004 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

HIOF - Growth -6.24 45.06 27.93 16.12



Rs. 10,000, if invested in HIOF, would have become 9,376 14,506 12,793 61,073





EQUITY OUTLOOKAfter a strong performance in the preceding fi nancial year, the fi nancial year 2015 - 2016 saw equity markets shedding part of these gains, tracking some of the global cues. From a domestic market perspective, there were headwinds in the form of second consecutive year of below normal monsoons, stagnation in the private investment cycle and impact of the clean-up of the banking system. This resulted in weak earnings momentum throughout the fi nancial year leading to downgrades. The tepid corporate performance coupled with the slow pace of crucial legislative reforms during the year disappointed market participants. The midcap

5

HSBC INDIA OPPORTUNITIES FUND 3


index managed to outperform the large cap indices and recorded a marginal gain during the fi nancial year. On the fl ows side, the FII net fl ows moved into the negative territory (-USD 1.51 bn) as against strong net infl ows of USD 18.08 bn seen in the previous fi scal. The domestic institutional investors however turned strong net buyers led by MFs (USD 12.10 bn of DII net infl ows) during the year as against net outfl ows of USD 3.71 bn seen in the previous fi scal.



NSE CNX Nifty -8.9%

S&P BSE 100 -9.0%

S&P BSE 200 -7.9%

S&P BSE 500 -7.8%

S&P BSE Midcap 0.3%

Source: Bloomberg







RBI took pragmatic view and cut rates gradually by about 150 bps during this period. The last cut of 50 bps (for the fi nancial year) was in Sept. 2015. The rate cuts were not fully passed through in lending rates by

6



similar quantum. The RBI on its part announced implementation of Marginal cost based Lending rate (MCLR) guidelines during the period.


Currency (INR) depreciated during the period from about Rs. 62.50 to a USD to about Rs. 68.50 in Feb 2016. Large part of the depreciation was attributable to low and volatile FII fl ows, devaluation of currency by China in the middle of the year and fear of Chines market collapse, which was extended to other emerging markets. Expectation of Fed hike in 2015 also contributed to risk off trade, which led to higher volatility.














The Sponsor is the Settler of the Mutual Fund Trust. The Sponsor has entrusted a sum of Rs. 1,00,000

7



(Rupees One Lakh only) to the Trustee as the initial contribution towards the corpus of the Mutual Fund.












SchemeUnclaimed Dividend Unclaimed Redemption



HSBC India Opportunities Fund 3,652,958.50 837 2,494,439.40 71

8







Com-plaintCode




receivedduring

theyear



ble*

Pending

Within 30

days

30 - 60 days

60 - 180 days

Beyond 180 days

0 - 3 months

3 - 6 months

6 - 9 months

9 - 12 months


1 1 2 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


1 9 9 1 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 2 2 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


1 62 62 0 0 0 0 1 0 0 0


0 0 0 0 0 0 0 0 0 0


0 1 1 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0

9


Com-plaintCode




receivedduring

theyear



ble*

Pending

Within 30

days

30 - 60 days

60 - 180 days

Beyond 180 days

0 - 3 months

3 - 6 months

6 - 9 months

9 - 12 months


0 4 4 0 0 0 0 0 0 0 0

IV Others 0 11 11 0 0 0 0 0 0 0 0

Total 3 90 91 1 0 0 0 1 0 0 0

Note:











Sd/-

N. P. Gidwani

Chairman



10



HSBC Mutual Fund - HSBC India Opportunities Fund

Report on the Financial StatementsWe have audited the accompanying fi nancial statements of HSBC India Opportunities Fund (the ‘Scheme’), which comprise the Balance Sheet as at 31 March 2016 and the related Revenue Account for the year then ended, and a summary of signifi cant accounting policies and other explanatory information, annexed thereto.






(i) in the case of the Balance Sheet, of the state of affairs of the Scheme as at 31 March 2016; and

(ii) in the case of the Revenue Account, of the net surplus for the year ended on that date.



11





2 As required by Clause 5(ii)(2) of the Eleventh Schedule of the Regulations, we report that the Balance Sheet and Revenue Account are in agreement with the books of account of the Scheme.


Sd/-




4

5 HSBC DIVIDEND YIELD EQUITY FUND





HSBC Dividend Yield Equity Fund (HDYEF) - an open ended Scheme*HDYEF aims to provide long-term growth from a diversifi ed portfolio of equities and equity related instruments.

The net assets of HDYEF amounted to Rs. 38.52 crores as at March 31, 2016 compared to Rs. 48.27 crores as at March 31, 2015. Around 98.98 % of the net assets were invested in equities, 1.06% of the net assets were invested in reverse repos / CBLO and (-0.58%) in net current assets as at March 31, 2016.

The scheme under-performed its benchmark due to overweight position in energy and underweight position in pharma and fi nancial sector. Going forward, the scheme will continue to be invested in companies offering attractive dividend yields along with profi tability and valuation framework.

Date of Inception : 21 March 2007 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

HDYEF - Growth -8.06 33.35 17.03 4.89



Rs. 10,000, if invested in HDYEF, would have become 9,194 13,335 11,703 15,402





EQUITY OUTLOOKAfter a strong performance in the preceding fi nancial year, the fi nancial year 2015 - 2016 saw equity markets shedding part of these gains, tracking some of the global cues. From a domestic market perspective, there were headwinds in the form of second consecutive year of below normal monsoons, stagnation in the private investment cycle and impact of the clean-up of the banking system. This resulted in weak earnings momentum throughout the fi nancial year leading to downgrades. The tepid corporate performance coupled with the slow pace of crucial legislative reforms during the year disappointed market participants. The midcap index managed to outperform the large cap indices and recorded a marginal gain during the fi nancial year. On the fl ows side, the FII net fl ows moved into the negative territory (-USD 1.51 bn) as against strong net infl ows of USD 18.08 bn seen in the previous fi scal. The domestic institutional investors however turned

5

HSBC DIVIDEND YIELD EQUITY FUND 5


strong net buyers led by MFs (USD 12.10 bn of DII net infl ows) during the year as against net outfl ows of USD 3.71 bn seen in the previous fi scal.



NSE CNX Nifty -8.9%

S&P BSE 100 -9.0%

S&P BSE 200 -7.9%

S&P BSE 500 -7.8%

S&P BSE Midcap 0.3%

Source: Bloomberg







RBI took pragmatic view and cut rates gradually by about 150 bps during this period. The last cut of 50 bps (for the fi nancial year) was in Sept. 2015. The rate cuts were not fully passed through in lending rates by similar quantum. The RBI on its part announced implementation of Marginal cost based Lending rate (MCLR) guidelines during the period.

6




Currency (INR) depreciated during the period from about Rs. 62.50 to a USD to about Rs. 68.50 in Feb 2016. Large part of the depreciation was attributable to low and volatile FII fl ows, devaluation of currency by China in the middle of the year and fear of Chines market collapse, which was extended to other emerging markets. Expectation of Fed hike in 2015 also contributed to risk off trade, which led to higher volatility.














The Sponsor is the Settler of the Mutual Fund Trust. The Sponsor has entrusted a sum of Rs. 1,00,000 (Rupees One Lakh only) to the Trustee as the initial contribution towards the corpus of the Mutual Fund.

7














Scheme

Unclaimed Dividend Unclaimed Redemption



HSBC Dividend Yield Equity Fund – – 2,469,482.42 92

8







Com-plaintCode




receivedduring

theyear



ble*

Pending

Within 30

days

30 - 60 days

60 - 180 days

Beyond 180 days

0 - 3 months

3 - 6 months

6 - 9 months

9 - 12 months


1 1 2 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


1 9 9 1 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 2 2 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


1 62 62 0 0 0 0 1 0 0 0


0 0 0 0 0 0 0 0 0 0


0 1 1 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0

9


Com-plaintCode




receivedduring

theyear



ble*

Pending

Within 30

days

30 - 60 days

60 - 180 days

Beyond 180 days

0 - 3 months

3 - 6 months

6 - 9 months

9 - 12 months


0 4 4 0 0 0 0 0 0 0 0

IV Others 0 11 11 0 0 0 0 0 0 0 0

Total 3 90 91 1 0 0 0 1 0 0 0

Note:











Sd/-

N. P. Gidwani

Chairman



10




HSBC Mutual Fund - HSBC Dividend Yield Equity Fund

Report on the Financial StatementsWe have audited the accompanying fi nancial statements of HSBC Dividend Yield Equity Fund (the ‘Scheme’), which comprise the Balance Sheet as at 31 March 2016 and the related Revenue Account for the year then ended, and a summary of signifi cant accounting policies and other explanatory information, annexed thereto.






(i) in the case of the Balance Sheet, of the state of affairs of the Scheme as at 31 March 2016; and

(ii) in the case of the Revenue Account, of the net surplus for the year ended on that date.


11






2 As required by Clause 5(ii)(2) of the Eleventh Schedule of the Regulations, we report that the Balance Sheet and Revenue Account are in agreement with the books of account of the Scheme.


Sd/-



4

2 HSBC DYNAMIC FUND





HSBC Dynamic Fund (HDF) - an open-ended SchemeHDF seeks to provide long term capital appreciation by allocating funds in equity and equity related instruments. It also has the fl exibility to move, entirely if required, into debt instruments in times that the view on equity markets seems negative.

The net assets of HDF amounted to Rs. 53.41 crores as at March 31, 2016 compared to Rs. 63.19 crores as at March 31, 2015. Around 80.78% of the net assets were invested in equities, 20.23% of the net assets were invested in reverse repos / CBLO and (-1.01%) in net current assets as at March 31, 2016.

HDF has outperformed its benchmark over the FY 2015-16 due to high cash balance and superior stock selection. The scheme allocates capital across equity and debt securities dynamically. In a year when equity market was down, approximately 22% allocation to cash (full year average) had a positive impact on attribution. In addition, selections in sectors like Financials, Energy, Materials, Healthcare, and Technology contributed to the outperformance during FY 2015-16.

Date of Inception : 24 September 2007 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

HDF - Growth -3.32 23.22 13.20 3.44



Rs. 10,000, if invested in HDF, would have become 9,668 12,322 11,320 13,339





EQUITY OUTLOOKAfter a strong performance in the preceding fi nancial year, the fi nancial year 2015 - 2016 saw equity markets shedding part of these gains, tracking some of the global cues. From a domestic market perspective, there were headwinds in the form of second consecutive year of below normal monsoons, stagnation in the private investment cycle and impact of the clean-up of the banking system. This resulted in weak earnings momentum throughout the fi nancial year leading to downgrades. The tepid corporate performance coupled with the slow pace of crucial legislative reforms during the year disappointed market participants. The midcap index managed to outperform the large cap indices and recorded a marginal gain during the fi nancial year. On the fl ows side, the FII net fl ows moved into the negative territory (-USD 1.51 bn) as against strong net

5

HSBC DYNAMIC FUND 2


infl ows of USD 18.08 bn seen in the previous fi scal. The domestic institutional investors however turned strong net buyers led by MFs (USD 12.10 bn of DII net infl ows) during the year as against net outfl ows of USD 3.71 bn seen in the previous fi scal.



NSE CNX Nifty -8.9%

S&P BSE 100 -9.0%

S&P BSE 200 -7.9%

S&P BSE 500 -7.8%

S&P BSE Midcap 0.3%

Source: Bloomberg







RBI took pragmatic view and cut rates gradually by about 150 bps during this period. The last cut of 50 bps (for the fi nancial year) was in Sept. 2015. Th

schemewise annual reports 2015 - 2016 · hsbc capital protection oriented fund series ii plan i ......

Documents