HSBC Mutual Fund has announced the launch of HSBC Consumption Fund.
The open-ended equity scheme will follow the consumption theme and aim 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, HSBC Mutual Fund said in a release.
The fund will track the Nifty India Consumption Index TRI. The fund has been rated in the very high risk category.
The new fund offer (NFO) will open on August 10, 2023 and close on August 24. It will reopen for subscription again on September 7, 2023.
The minimum application amount is Rs. 5,000 and in multiples of Re. 1 for investing in the lump sum mode. The minimum application amount is Rs. 1,000 and in multiples of Re. 1 thereafter.
During the NFO period, the units will be priced at Rs. 10 each, according to the scheme information document.
Investors can also choose to invest through systematic investment plan (SIP) in the weekly, monthly, and quarterly modes. The investment will be 12 instalments of Rs. 500 each, six instalments of Rs. 1,000 each, and four instalments of Rs. 1,500 each, for the three modes, respectively.
The fund will invest 80 per cent in consumption-related sectors and up to 20 per cent in consumption-driven sectors.
According to HSBC Mutual Fund, 80 per cent of the portfolio will actively track companies that will benefit from the consumption trend in India. However, the fund will have the flexibility to invest up to 20 per cent outside its benchmark index in order to gain from favourable market trends, it said.
“Fund managers will look for opportunities across market caps to generate potential capital growth over the long-term, along with a combination of top down and bottom-up approach to identify sectors expected to benefit from consumption and focus on fundamentals of individual businesses,” HSBC Mutual Fund said.
HSBC Mutual Fund said that the product is suitable for those who are seeking to create wealth for the long term and invest predominantly in equity and equity-related securities of companies engaged or expected to benefit from consumption and consumption-related activities.
Kailash Kulkarni, CEO, HSBC Asset Management Company (AMC) 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 more aspirational, there is a sea change in their consumption and spending patterns, strongly backed by digitisation. These factors will drive strong consumptions spends in the coming decade. Overall, we believe that it is 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.”
Venugopal Manghat, CIO-Equity, HSBC AMC said: “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, financial strength of the company and the key earnings drivers.”