HSBC Managed Solutions
An asset allocation fund structured as Fund of Fund offering you investors with three distinct Plans with different asset allocation thereto to suit your risk profile.
Summary
| Type |
An open-ended Fund of Fund scheme |
Additional purchase: |
Rs 1,000 and in multiples of Re 1 thereafter |
| Min. Investment: |
For Lumpsum -> Rs 5,000 and in multiples of Re 1 thereafter
For Systematic Investment Plan (SIP)
Monthly Option: Minimum Rs 1,000 per month for a minimum period of 12 months
Quarterly Option: Minimum Rs 3,000 per quarter for a minimum period of 4 quarters
|
Benchmark Index |
Plan: Managed Solutions India - Growth: Composite Index constituting 80% of BSE 200 Index and 20% of CRISIL Composite Bond Index
Plan: Managed Solutions India - Moderate: CRISIL Balanced Fund Index
Plan: Managed Solutions India - Conservative: Composite Index constituting of 90% into CRISIL Composite Bond Index and 10% of BSE 200 Index |
| Face Value |
Rs 10 per unit |
Expense Ratio: |
For Regular Plan - Upto 2.50%
For Direct Plan - Upto 2.00% |
| Entry Load |
Nil |
Exit Load: |
Nil |
| Issue Opens |
April 09, 2014 |
Issue Closes: |
April 23, 2014 |
Investment Objective*
HSBC Managed Solution (HMS) has three plans available under it, namely: Managed Solutions India - Growth, Managed Solutions India - Moderate and Managed Solutions India - Conservative. The investment objective for each of these plans is as under:
Managed Solutions India - Growth
The objective of the Plan is to provide long term total return primarily by seeking capital appreciation through an active asset allocation with diversification commensurate with the risk profile of investments by investing predominantly in units of equity mutual funds as well as in a basket of debt mutual funds, gold ETFs and other ETFs, offshore mutual funds and money market instruments.
Managed Solutions India - Moderate
The objective of the Plan is to provide long term total return aimed at capital appreciation and providing income through an active asset allocation with diversification commensurate with the risk profile of investments by investing in a basket of debt mutual funds, equity mutual funds, gold ETFs and other ETFs, offshore mutual funds and money market instruments.
Managed Solutions India - Conservative
The objective of the Plan is to provide long term total return aimed at providing income through an active asset allocation with diversification commensurate with the risk profile of investments by investing predominantly in units of debt mutual funds as well as in a basket of equity mutual funds, gold ETFs and other ETFs and money market instruments.
The investments into underlying schemes by each Plan under the Scheme would be based on the investment objective, asset allocation pattern and risk profile of such Plans under the Scheme.
The Plans under the Scheme will be predominantly investing in HSBC Mutual Funds and third party funds will be invested into only where HSBC Mutual Funds are not available for investments.
However, there is no assurance that the investment objective of the Plans under the Scheme will be achieved.
*Source: Scheme Information Document
Is this fund for you?
HMS is an asset allocation fund structured as Fund of Fund (FoF) offering you investors with three distinct Plans with different asset allocation thereto to suit your risk profile. Thus the allocation to the asset classes i.e. equities (domestic and offshore), bonds, gold and cash (money market instruments) are accordingly distinctly designed for each Plan.
You see, asset allocation is strategy based on the concept of risk diversification. HMS offers its investors to tactically allocate assets between a mix of equity, debt, money market instruments, gold ETFs, other ETFs and offshore mutual funds in accordance to their risk profile.
The asset allocation as mandated for Plan, "Managed Solutions India - Growth"; is for investors primarily seeking for capital appreciation by predominantly investing in in units of equity mutual funds.
The "Managed Solutions India - Moderate" Plan is suitable for investors looking for capital appreciation as well as income accruals, by investing in nearly in balanced proportion between debt and equity mutual funds, and at the same time some proportion in gold ETFs and money market schemes. Likewise, "Managed Solutions India - Conservative" Plan is suitable for investors who mainly are risk averse and who are seeking income accruals rather than capital appreciation, by investing predominantly in debt and money market schemes and a petite portion in equity mutual funds and gold ETF.
Thus before investing your hard earned money, it is imperative for one to assess his / her risk profile and also see whether such a fund is suitable in your endeavour to meet some financial goals.
Portfolio Strategy
The portfolio of HMS will mainly consist of:
- Existing or prospective schemes of HSBC Mutual funds that invests in equity and equity related instruments, debt, money market instruments, etc.;
- Third party domestic mutual funds investing in equity and equity related instruments, debt, money market instruments, etc.;
- Units of offshore mutual funds;
- Units of Gold ETFs or other ETFs;
- Money market instruments (including overnight instruments such as Collateralized Borrowing and Lending Obligations (CBLOs), repurchase and reverse repurchase obligations in Government securities and treasury bills); and
- Short-term deposits of commercial banks
HMS will
not invest in any sector or thematic funds across equity and debt asset classes. Moreover, HMS will not invest in derivatives, securitised debts or unrated instruments. However the underlying schemes where HMS is investing may have exposure to these securities and may also undertake short selling, securities lending. But HMS and the underlying schemes will not invest in Credit Default Swaps (CDS).
The fund manager may select the underlying schemes on the basis of the investment objective, asset allocation pattern and the risk profile of each Plan of HMS. As per the offer document, the underlying schemes that may be considered for investments by each of the Plans of HMS are:
As far as the asset allocation is concerned, it will vary as per respective Plans and will be as under:
| Instruments |
Allocation Range
(%) |
Risk Profile
(Low / Medium / High) |
| Minimum |
Maximum |
| Plan: Managed Solutions India - Growth |
| Equity Schemes (Units of Domestic Equity and Offshore Equity) |
55 |
90 |
High |
| Debt Schemes |
10 |
30 |
Low to Medium |
| Gold and Other Exchange Traded Funds |
0 |
15 |
Medium to High |
| Money Market Schemes / Liquid Funds (including upto 5% in Money Market Instruments) |
0 |
20 |
Low to Medium |
| Plan: Managed Solutions India - Moderate |
| Equity Schemes (Units of Domestic Equity and Offshore Equity) |
30 |
70 |
High |
| Debt Schemes |
30 |
70 |
Low to Medium |
| Gold and Other Exchange Traded Funds |
0 |
15 |
Medium to High |
| Money Market Schemes / Liquid Funds (including upto 5% in Money Market Instruments) |
0 |
25 |
Low to Medium |
| Plan: Managed Solutions India - Conservative |
| Equity Schemes (Units of Domestic Equity and Offshore Equity) |
0 |
15 |
High |
| Debt Schemes |
55 |
100 |
Low to Medium |
| Gold and Other Exchange Traded Funds |
0 |
5 |
Medium to High |
| Money Market Schemes / Liquid Funds (including upto 5% in Money Market Instruments) |
0 |
25 |
Low to Medium |
(Source: Scheme Information Document)
Respective Plans of HMS will have different benchmarks as given below to track their performance.
| Plan(s) |
Benchmark |
| Managed Solution India - Growth |
Composite Index constituting 80% of BSE 200 Index and 20% of CRISIL Composite Bond Index |
| Managed Solutions India - Moderate |
CRISIL Balanced Fund Index |
| Managed Solutions India - Conservative |
Composite Index constituting of 90% into CRISIL Composite Bond Index and 10% of BSE 200 Index |
However it is noteworthy that, Plans' performance may not be strictly comparable with the performance of the benchmark due to the inherent differences in the construction of the portfolios.
Fund Manager Profile
HMS will be managed by the trio, Mr Piyush Harlalka, Mr Gaurav Mehrotra and Mr Sanjay Shah.
Mr Piyush Harlalka is the dedicated fund manager for investment in foreign securities and at HSBC Mutual Fund also manages HSBC Emerging Market Fund and HSBC Brazil Fund. He has to his credit a MBA (in Finance) and is also is a qualified Chartered Accountant (CA) and Company Secretary (CS). He has over 7 years of experience in fund management and research. Prior to joining HSBC Mutual Fund in July 2007, he was with Batlivala & Karanai Securities Pvt. Ltd. as an Assistant Vice President (AVP) and Research Analyst.
Mr Gaurav Mehrotra will be managing equity investments in the Indian market and at present is also the fund manager for HSBC Unique Opportunities Fund. He has to his credit a Bachelor's degree in Engineering (B.E.) and Post Graduate Diploma in Business Management (PGDBM). He has over 7 years of experience in fund management and research. Prior to joining HSBC Mutual Fund in September 2007, he has worked with JP Morgan Services India Pvt. Ltd. in equity research and with Tata Consultancy Services Ltd. as a business analyst.
Mr Sanjay Shah will be managing the fund's fixed income portion in India. He is currently the Senior Vice President and Fund Manager (for Fixed Income) at HSBC Mutual Fund and at the fund house also manages HSBC Dynamic Fund (Fixed Income Portion), HSBC MIP - Savings & Regular Plan (Fixed Income Portion), HSBC Cash Fund, HSBC Income Fund - Investments Plan & Short Term Plan, HSBC Gilt Fund, HSBC Ultra Short Term Bond Fund, HSBC Floating Rate Fund - Long Term Plan and HSBC Flexi Debt Fund. He has over 13 years of experience in research and risk and has to his credit a Bachelor's degree in Commerce (B.Com), a Post Graduate Diploma in Management (PGDM) and is a qualified Chartered Accountant (CA). Prior to joining HSBC in December 2008, Mr Shah has worked with FIL Fund Management Pvt. Ltd (as a credit analyst), Lehman Brothers Structured Financial Services Pvt. Ltd. (as Vice President - Convertible Products), Rabo India Finance Pvt. Ltd. (as a Senior Manager - Credit Risk) and ICICI Bank Ltd. (as a Manager - Credit Risk).
Fund Outlook
HMS being a Fund of Fund scheme, its fortune would be closely linked to the performance of the underlying schemes in the portfolio. At present the underlying equity and debt mutual fund schemes of the fund house aren't generating appealing returns and neither are they consistent in their performance. Only one debt fund - HSBC Flexi Debt Fund - is worthy of holding in the portfolio. Inconsistent returns clocked by most of these underlying schemes, instil risk for investors and may stunt wealth creation for investors.
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